Construction activity troughing, No rise forecast till 2030: WT Partnership Australia

Australia-wide residential construction activity fell in FY 2019 but is expected to recover through to 2022, according to a recent report released by WT Partnership Australia.

The report found that the current decline is more of a ‘trough’ and is expected to last the next two years, then stabilise through the end of a relatively ‘mild cycle’ over the seven years to 2026; activity is then expected to rise through to 2030.

Whilst the residential slow down comes off the back of all-time highs in the eastern states, demand for new housing will still be driven by continuing high population growth in Sydney, Melbourne and Southern QLD, despite cuts to immigration.

Construction and engineering will be driven by $100 billion of infrastructure investment announced by the Federal Government. This will be focused on “shovel ready” projects with relatively short completion windows. 

Challenges for the year

1. The cladding issues has had a major impact on the selling and buying of apartments

2. There is more red tape and further policy measures that will decrease immigration leading to lower growth in demand for dwellings

3. The recent interest rate cuts have seen housing prices slightly strengthen

4. Building approvals for new apartments has dramatically dropped

5. Federal Government has flagged a ten-year $100 billion investment in transport infrastructure across Australia. While this is positive, it is absolutely vital that these infrastructure projects do not blow due to the growing population needing more transport options.

6. Biggest focus in terms of value is in bridges, railways and harbours, followed by electricity and pipelines