Australia at the tail end of apartment boom, say builders

first_imgMajor builders are forecasting that turnover growth will be 22.9 per cent this year, and then moderate to 6.8 per cent in 2018. Picture: Liam Kidston.ANALYSTS have been waiting with bated breath for it and now major builders have confirmed we’re at the tail end of the apartment boom.The latest Australian Industry Group/Australian Constructors Association Construction Outlook survey has found that major builders expect the value of apartment construction to rise by a massive 22.9 per cent this year before dropping back to single digit growth from 2018.The 2017 calendar year will be the second in a row that multi-level apartments have led turnover growth forecasts for the construction sector.“The growth outlook for multi-level apartment construction remains strongly positive in 2017 (+22.9 per cent) as constructors continue to progress through a solid backlog of work, although the pace of growth will moderate in 2018 (+6.8 per cent) as the current apartment building cycle reaches its peak,” the report said. NINE PROPERTY CHANGES FROM JULY 1 BRACE FOR A BATTLE OF PENTHOUSES LATEST REAL ESTATE NEWS SENT TO YOUR INBOX FOR FREE The sector led with a 15.5 per cent rise last year, though it was unable to make up for the massive 16.5 per cent slump in engineering sector work, which saw total major construction activity drop 8 per cent nationally.Labour costs were expected to become pressure point this year, with 39 per cent of respondents bracing for major or moderate rises in direct labour rates and subcontractor rates, though the industry was also now seeing less reports of increases in the cost of construction materials.Overall, turnover from major construction project work – which includes engineering, commercial construction, multi-level apartments and overseas business – was expected to rise by 4.3 per cent this year.That’s expected to be followed by a stronger lift of 6.4 per cent in 2018 off the back of a rise in non-mining relative infrastructure construction, according to AiGroup chief executive Innes Willox.More from newsMould, age, not enough to stop 17 bidders fighting for this home3 hours agoBuyers ‘crazy’ not to take govt freebies, says 28-yr-old investor3 hours ago“The overall pick-up in major project work in the construction sector confirms we are leaving behind the extended period during which the industry, and indeed the national economy, was dominated by the wind-down of the historic boom in mining and energy-related projects.“While apartment building continues to feature prominently, it is clearly set to scale back in the period ahead. In place of mining-related work and apartment building, over the rest of 2017 and into 2018 the construction sector is anticipating further expansion in infrastructure investment, particularly in road and rail works, and a lift in private sector commercial construction.” FORECAST TURNOVER GROWTH FROM MAJOR CONSTRUCTION WORK: Engineering 2.9 per centCommercial construction 1.6 per centMulti-level Apartments 22.9 per centOverseas business 4.1 per centTotal major construction 4.3 per cent (Source: AiGroup June 2017 survey results)last_img

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