The CoreLogic Construction Monthly report, out today, confirmed 1,719 development applications and proposals were added to the construction pipeline across Australia in January. 

CoreLogic commercial research analyst Eliza Owen commented that this represents a significant increase on the number of development applications captured in the previous month (+31%). The number of projects added to the pipeline over January is slightly lower than the five year average, which is approximately 1,789 new project applications per month across Australia.
  
Ms Owen said, “Despite the lower than average figure, this is likely just seasonal, with the number of new project applications accelerating as we come out of the holiday period."

Ms Owen said, “Despite the lower than average figure, this is likely just seasonal, with the number of new project applications accelerating as we come out of the holiday period."

"Interestingly, apartment and unit projects make up a large portion of new proposals.”  

Residential projects captured by CoreLogic represented 21% of the $17.9 billion in work proposed over the last 12 months. The residential proposals make up 32% of the number of new projects captured in January. New projects in apartments and units are highly concentrated along the east coast and in capital cities, despite the CoreLogic Hedonic home value indices reporting a 1% quarterly decline in combined capital dwellings.  

As reported in the December edition of the Construction Monthly, affordable housing is also rising as a component of residential development in response to affordability constraints in our capitals. Ms Owen confirmed that this was demonstrated recently with the revival of the Kamira Court Project in Western Sydney, which finally saw expressions of interest released after the initial development proposal in 2011.   

Key Findings: 

  • The combined value of projects captured in the pipeline over January was $18 billion. This combined construction value is above the 5 year average of AU$13.6 billion, and was also substantially higher than the $6.5 billion recorded in December. 
  • The value of projects commencing is still relatively low, but is expected to rise over 2018. 

Ms Owen said, “While development applications continue to increase, the number of projects moving into construction in January was 640 – far lower than the 5 year average of 1,023 projects per month.” 

“This result could be partially due to seasonal factors, as CoreLogic project data indicates the average commencements for January over the last 5 years was 805 projects.” 

The findings also confirmed that the value of projects moving into construction was also slightly lower on December’s $4.3 billion in commencements, at $4.2 billion.  

“The commencement value is lower still than the average monthly commencements of $5.3 billion in construction. However, with the steady increases recorded in the pipeline, it is estimated that construction activity will rise in 2018,” Ms Owen said.