The Smartest Tool in the Shed
Man of Steel: Billionaire Sets out to Revive Whyalla
Prevention Key in Reducing Spinal Injuries
Construction Tech Trends for 2019 and Beyond
Trendsetters and Construction Stars at the Master Builders Australia National Awards
Ancient Profession Moves into the Future
Don't Let Scope Creep Sneak Up On You
What's it Worth to be a Tradie?
August 21, 2017
According to the latest update from the Ai Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI) the industry continues to expand, with the results showing the fastest pace of overall industry growth since the survey began in 2005.
Commercial construction and house building in particular were earmarked as key drivers of growth in July. Whilst commercial construction saw the highest rate of expansion in twelve years, house building has recorded the fastest pace of growth in three and a half years.
However, recent reports have suggested a dampening in residential construction with many onlookers arguing that we have past the peak and can expect a rapid downturn in both housebuilding and apartment building within the next twelve months.
Indeed, the latest Building in Australia forecast from BIS Oxford Economics has forecast the number of dwelling build starts will drop from a peak of 230,000 down to 160,000 within three years. The decline only looks worse if you consider the high-rise apartment sector, which is expected to slump by almost 50 per cent.
Number of new dwelling commencements, source: ABS, BIS Oxford Economics
Jobsite spoke to Malcolm Gunning, Director and President of the Real Estate Institute of Australia, in an exclusive interview to hear about what they’re seeing from both an agent’s perspective, and from their insight into the level of approvals being lodged at the start of the process.
“With any sort of development there is a twelve-month lag. The number of new properties hitting the market now is the result of a pipeline that takes up to three years from approval to completion. It takes time for a battle ship to change direction, it can’t do it immediately.”
“We expect to see the figures start to head south around later this year,” Mr Gunning said.
Mr Gunning pointed to stagnation and decline in the number of development approvals as an indication that the current state of expansion in residential construction is set to change in the near future.
Whilst Australian building approvals picked up in June, they remain down compared to the previous year. According to the ABS, the new building approvals in June were down 14.9% on June 2016, standing at 17,463.
According to Mr Gunning, a key factor in the recent decline in approvals is the change in lending rules, shifting the level of investment being poured into residential construction. Indeed, increased restrictions imposed by the Australian Prudential Regulation Authority (APRA) have been seen to limit the level of foreign investment, in addition to stricter lending practices having an impact on local investors.
“The development approvals, particularly in Sydney and Melbourne, have been significantly less over the last few years and this is down to tighter lending rules”, Mr Gunning said.
Housing Skills Shortage will Impact Home Building in Australia Warns HIA
If only there was a go-to template or formula you could follow in order to guarantee success in the bidding process. Long story short, there is no one right answer or solution. However, that doesn’... Read More
Construction work as we well know is a team effort, requiring the synchronization of workers, equipment and materials. And just as construction wo... Read More
Listen in to this free webinar with Carey Larsen, Social Marketing Manager at Procore, Bob Gardner, CEO of Gardner Builders, and Jessica Stoe, Bran... Read More
At a rural Ohio job site, Wieland Construction and its subcontractors are managing progress entirely from mobile devices — an investment they say h... Read More
The majority of project leaders and teams on site today still utilize outdated, manual tools and processes—even though there are plenty of technolo... Read More
Keeping workers safe on road construction sites is an ongoing problem, underlined by the fact that the number of fatalities at these sites increase... Read More
Automation has improved by leaps and bounds over the last decade, and the technology is proving viable as more companies start to incorporate some ... Read More