Brisbane construction market is tipped to have the quickest recovery, driven by a strong pipeline of pre-existing projects like Queen’s Wharf, and the Cross River Rail station developments.
Supported by its pre-existing pipeline of major projects under way and yet to start, global consultancy firm Turner & Townsend’s insight market report found that Brisbane’s construction market is forecast to have the quickest recovery, followed by Sydney, Melbourne, Perth and then Adelaide.
“Queensland has a robust pre-existing pipeline of major projects committed, which should help to uphold construction activity in the interim,” Turner & Townsend director Simon Kearney said.
“This includes Queen’s Wharf, the Cross River Rail station developments, 360 Queens Street Office Tower, and Logan and Caboolture Hospital redevelopments.”
The insight report for the fourth quarter of last year highlights the “road to recovery” for Australia’s construction markets. It notes the outlook for Australia’s construction markets is positive across all capital cities.
While construction activity is expected to be subdued over 2021, an improvement is anticipated from 2022 onwards.
Kearney says all construction markets are forecast to see an increase in non-residential construction activity between 2022 and 2024, driven by a solid pipeline of major public sector projects and the recovery of private sector investment forecast to begin in the second half of this year.
“Tendering conditions are extremely competitive right now and the focus is on public sector projects such as schools, hospitals and defence, while there are limited private sector projects out for tender,” the report notes.
“We expect this competitive market to continue over the first half of 2021, or until private-sector construction, activity starts to pick up in each market.”
Perth’s construction sector heating up
The report notes that Western Australia’s economy and construction market appears to have now stabilised after the recent period of uncertainty and volatility.
Government stimulus in education and infrastructure sectors, together with a steady progression of works in food retail are expected to uphold construction activity over 2021.
“Government stimulus is driving a surge in housing demand in Western Australia, and we are likely to see the impact of this flow over into other market sectors,” Kearney said.
“Already we are starting to see labour shortages and supply chain constraints materialise and this could start to impact construction costs across other sectors.”
CBRE predicts Perth’s residential market is on track to record double-digit growth for the first time in 11 years, with house prices tipped to grow between 9 per cent and 12 per cent this year.
When it comes to construction expenditure and investment into new projects over last year, Turner & Townsend found that the public sector did most of the heavy lifting,
“Many private sector projects were placed on hold or cancelled altogether due to the uncertainty brought on by the pandemic,” Kearney said.
In the last quarter of 2020, the report notes a distinct improvement in sentiment across construction markets in Australia.
“As restrictions continued to ease from the relatively low Covid-19 case numbers, consumer and business confidence strengthened and economic activity gained momentum.”
Article Source: theurbandeveloper.com
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