This article is from the Australian Property Journal archive
THE construction sector declined by 2.6% in the March quarter dragged down by falls in building, non-residential and engineering.
According to the Australian Bureau of Statistics, the only bright spot was residential construction, which grew by 1.5%. However, the small gain in residential construction was not enough to offset the 1% in building, a 5.5% fall in non-residential and a 4.2% decline in engineering.
Over the 12 months period, building construction was 1% higher and residential was up 5.7%. In contrast, non-residential fell 7.2% and engineering was down 13.7% over the same period.
Across the country, New South Wales remains the star performer with construction work rising for six quarters, the ACT was up for two quarters and Victoria for one quarter, whilst South Australia fell in March after rising for three quarters.
Queensland has fallen for nine quarters, Western Australia, Northern Territory and Tasmania each recorded three quarterly declines.
Despite the negative overall figures, the Property Council of Australia said residential work has reached a new record high of $16.5 million.
“Residential construction is one of the few bright spots in the economy,” chief of policy and housing Glenn Byres said.
“We will however also need to keep a track on these numbers going forward as changes to project and purchase lending practices could constrain future growth,” he warned.
A NAB survey released last month found fewer developers are looking to enter the market in the near term due to funding issues.
The NAB Commercial Property Survey Q1 2016 found around 50% of developers plan to start new works in the next six months, down from 52% in Q4 and 58% a year ago.
For developers intending to start new projects, a survey low of 38% are targeting residential compared to 54% in Q4.
Property developers also reported a further deterioration in their debt and equity funding situations (net negative overall) and expect it to worsen in the next six months, particularly for debt financing.
Australian Property Journal
