The NSW construction industry is booming, but what factors are contributing to this boom and how long will the state keep its building activity pumping?
52,236 houses and apartments broke ground over the course of 2014/2015, double the figures attained during 2008/2009.
Residential construction approvals have jumped 30.4% over the first 8 months of 2015 in comparison to the same 2014 period.
Semi-detached & non-detached housing segment approvals are also up by a huge 44.8%.
Total construction levels were up last financial year by close to 11% in comparison to 2012/2013.
NSW monetary policy remains accommodative despite lending requirements tightening and population growth slackening (though NSW still maintains the second highest rate of national population growth).
Over the past year NSW’s economy has grown by 3.35%.
The state’s ongoing home building surge could be considered a reaction to the situation of inadequate housing supply NSW found itself in a few years prior.
Plenty of money is pouring in from China in pursuit of commercial and residential property assets.
A Property Council of Australia survey points-out property industry confidence is riding highest in NSW compared to all other Australian states (aside from the ACT).
The state’s office vacancy rates are at 5 year lows.
Massive volumes of new property stock will be coming onto the market in the near-term.
Infrastructure activity is rising thanks to NSW’s enormous rail & road building program.
When it comes to the state’s construction workers, they’ve seen their workforce grow by 17,800 over the last 2 years, and by 27,600 over the last 3.
While being in demand is good news, the one downside is that a skills shortage is currently laying upward pressure on fees and trade availability.
Road and transport activity will keep on growing with projects such as NorthConnex, WestConnex, Badgerys Creek Airport, Northwest Rail Tunnel and others coming to fruition.
Multi-residential construction activity is expected to remain elevated.
Stand-alone building activity will rise slightly.
Work on the NBN will ensure telecommunications construction activity remains high.
Hotel and accommodation building activity will keep growing fiercely thanks to numerous projects including: Jack Nicklaus Golf Course, Anvil Creek Residential & Golf Resort, Golden Bear Lodge, Four Points By Sheraton Hotel the Shaolin Temple Residential and Tourist development, the Sandstone Precinct development.
The Australian Construction Industry Forum projects the state’s building activity will remain strong, growing by 1% over the remainder of 2015/2016 then holding steady over the 2 years thereafter, and set to boom again towards the close of the decade.