Australia’s construction industry is in a complex shift, reflecting diverse growth in the Australian economy.
While on aggregate, the residential construction space is steadying, there is a dramatic movement away from apartment developments in New South Wales. Property values in the Sydney metropolitan have started to fall, and the pipeline of new residential projects in New South Wales were down 41% in the year to September. In Queensland, apartment developments show little evidence of slowing down, but the Brisbane Council are accounted for 46% of deferred apartment projects in the state.
Despite threatening declines in New South Wales, full time employment across Australia is growing rapidly. This comes as Western Australian domestic demand enters an increasingly clear recovery. In Western Australia, the value of construction work commenced was up 71% on the previous year, led by recoveries in mining, civil engineering and apartment and unit developments.
Looking forward, the recovery of Australia’s private sector is likely to drive increased interest in commercial real estate, as demand for work spaces meet subdued supply. Australia wide, the number of new commercial projects increased 10% on the previous year, signalling a recovery in this relatively neglected construction segment.