The latest industry forecast report for Victoria is now available.

Migration-fueled population growth coupled with significant transport investment continues to drive Victoria’s economy, not least Victoria’s building and construction industry.

Nevertheless, the forecasts show that the growth in building and construction activity is approaching its peak, with further growth expected in the 2018-19 financial year before moderating slightly in 2019-20 and onwards.

Key Highlights

  • Residential building activity saw a total of $22.9 billion of value of work done, or 71,792 dwellings constructed, on 2017-18 and forecasted to grow in 2018-19 and 2019-20 to top $25 billion before moderating in 2020-2021.
  • Non-residential construction had its best year in 2017-18 with the value of work done reaching $12.9 billion and forecasted to grow to $13.6 billion in 2018-19 before moderating slightly in 2019-20 onwards.
  • Engineering construction saw the value of work done reaching $13.8 billion in 2017-18 and is expected to top $15 billion in 2018-19 and 2019-20 due to investment in major transport projects.

 

Residential Building

Residential construction has benefited greatly from the surge in the state’s population in recent years. This is reflected in the trend growth in the value of work done in the construction of residential buildings, which reached a total of $22.9 billion in 2017-18 – an increase of 2.4 per cent from the previous year. As a result, Victoria saw the construction of 71,792 new dwellings in 2017-18.

While houses continue to comprise the majority of the residential building activity, the increase in 2017-18 was largely attributed to new apartments. The value of work done in the construction of new apartments increased by 6.6 per cent compared to the previous year – valuing at a total of $10.8 billion which led to 33,416 new dwellings being built.

It is forecasted that the value of work done for residential buildings will continue to grow in 2018-19 and 2019-20 and top $25 billion before moderating slightly in 2020-21 and 2021-22 mainly due to the expected drop off in new apartment construction activity.

Non-Residential Building

Non-residential construction continues to improve, with 2017-18 being the best year for commercial construction on record, both nationally and within the state. Victoria saw the value of non-residential building work reach $12.9 billion, an increase of 24.2 per cent from the previous year and is expected to reach $13.6 billion in 2018-19 before moderating slightly in 2019-20 and onwards.

Engineering Construction

The value of engineering construction work done in 2017-18 was $13.8 billion, an increase of 16.3% from the previous year.

Engineering construction is expected to top $15 billion in 2018-19 and 2019-20, driven largely by significant investment in major transport projects such as the $10.9 billion Metro Rail, the $1.6 billion Caulfield to Dandenong rail upgrade, and the $1.6 billion Port Melbourne re-development.

See the detailed report here.