The June edition of the CoreLogic Construction Monthly Report reveals $20.3 billion worth of new development applications were captured over May and are 39% higher than for April.
Mining made up 45% of this new project value. A $4.3 billion minerals processing plant in Western Australia was one such project that pushed up the month on month value of new mining projects in the pipeline. The Perdaman Urea Manufacturing Plant, to be located in Collie WA, is currently in early planning stages. Pending feasibility and approval, construction would commence in 2022.
The total construction value of new projects captured over May in Western Australia was over $8 billion, the highest of the states and territories. Construction related to mining and mineral processing in Western Australia has seen a steady rebound since the beginning of 2018, coinciding with a gradual rebound in metal and energy commodities such as coal and iron ore.
CoreLogic commercial research analyst Eliza Owen said, “The recovery in Western Australian, mining-related construction coincides with changing building dynamics on the east coast. In NSW, the value of commercial applications has risen steadily since the start of the year, jumping from $216 million in April to $515 million in May.”
“New opportunities in the commercial real estate sector will offset losses in the residential space; the CoreLogic Hedonic Indices show declines in the Sydney and Melbourne dwelling markets, which will likely act as a disincentive to further growth in residential development.”
Major commercial real estate projects in NSW include Tipalea Partners’ $90 million development at 23 Burke Road, in the inner west suburb of Alexandria, and Dexus’ 33 storey commercial tower in George Street, Parramatta.
In Victoria, a non-residential construction focus is largely being led by a multi-billion dollar schools upgrade program. The Victorian Budget for 2018-19 announced construction work for new schools in Melbourne’s outer suburban growth areas. Eight of these have now been fast tracked with expressions of interest seeking registration for design and construction.
Victoria saw the second highest combined value of development applications over the month behind Western Australia. At $5 billion, the value of new development applications captured over May in Victoria accounted for 24.6% of the total value in new construction captured across Australia.
While Western Australia led the development application space in construction value, Victoria saw the highest value of work commencing over May. A total of $2.7 billion worth of work commenced in Victoria over the month, out of $10.1 billion across Australia.