This article is from the Australian Property Journal archive
THE year ahead will be a boom for the building industry with record numbers of approvals, according to the Master Builders.
Master Builders’ Building Industry Outlook report has forecast 46,000 dwelling unit commencements for 2015-16 – an increase of 4.5% on the 43,051 starts in 2014-15.
“In 2016-17 we estimate dwelling unit commencements will begin to level-off, returning to 43,000 starts,” deputy executive director Paul Bidwell said.
“Looking forward, the prospects for the residential sector during the next 12 to 24 months are strong,” he added.
Bidwell said the growth will spread further into the regions and across housing types, particularly detached houses. Owner-occupiers will increasingly move into the market, while investors will become more cautious.
“High-rise residential developments in south-east Queensland will continue to be a strong performer as the large number of projects approved in 2015 move into the construction stage
“The lion’s share of dwelling approvals are multi-unit developments, up nearly 54% year-on-year. For the first time in history, approvals for multi-units exceed detached housing,” he continued.
Despite the bright outlook, disparity continues to grow across the regions.
Bidwel said growth for the most part is concentrated in south-east Queensland. Central Queensland, Mackay and Whitsunday continue to struggle with little or no demand along with Townsville and Toowoomba/Darling Downs.
Meanwhile the commercial sector is expected to remain flat. In 2014-15 public sector investment in non-residential buildings (schools, hospitals etc.) was nearly half the previous year, down by nearly $1 billion. Businesses are also failing to grow their investment in new warehouses, factories and offices.
“The lack of demand in the commercial sector has meant that the competition for the limited pool of available work remains strong, with businesses holding profit margins to razor thin levels in order to win contracts.
“The pressure this puts on contractors is not sustainable. The mixed conditions are reflected in industry sentiment which, while improving are only just within positive territory,” Bidwell said.
Australian Property Journal
