Australian construction sectors are amongst the most costly in the world, but an international report has found that there is relief on the horizon.
Multi-national professional services company Turner & Townsend surveyed 35 construction markets across the globe and found that Australia is becoming more attractive to overseas investors.
The company projects that the falling Australian dollar along with low interest rates (and less mining & infrastructure related work) means there is less competition for resources, causing Australia to become a much more affordable place to build and invest in.
“The 2015 report shows that compared to 2011, it would cost overseas investors paying in US dollars 13% less to construct buildings in Australia, which is a significant reduction… whereas Australia previously was considered a high-cost destination for construction investment, you'd see it now as being in the middle," stated senior Economist Gary Emmett.
While increased investment and lowered & stabilised costs are a boon for the sector, Mr Emmett points out there may be a downside.
“Overall, it is a great time to build. Construction costs should remain fairly stable although some residential construction trades may become increasingly difficult to source, adding pressure to costs”, noted Mr Emmett.
While Sydney will likely see 4% price rises this financial year, Brisbane, Melbourne and Perth will probably only experience around 2% hikes which is good news for local builders who won’t benefit from the lower Australian dollar.
"Even for local construction companies, given the low rate forecast increase for the next two years … you would think it would be a good time to build," said Mr Emmett.
Detached house, cost per square metre in:
Brisbane & Perth: $1,650
Prestige, detached house, cost per square metre in:
Brisbane & Perth: $3000
Townhouse, cost per square metre in:
Low Rise Apartment, cost per square metre in:
High Rise Apartment, cost per square metre:
Melbourne & Sydney: $2,700