Forecast on Victorian Building and Construction
When we talk about economic growth in Australia, the state that comes to mind is Victoria. According to experts, Victoria is still the best performer not only in that aspect but in terms of population gains as well which also affect the employment and demand in housing. One of the reasons for this is migration, and over the past year, it has affected the state in many ways. However, the royal commission into banking gave some uncertainty and even affected the building activities of residential properties.
What are the important things builders and buyers should be aware of in terms of building and construction?
Here are the highlights of the forecast on building and construction according to Master Builders Victoria:
- The growth in terms of population has had made a huge impact on the residential construction over the past few years. However, because of the tighter credit conditions, there is a huge possibility that it’s going to change. In 2018, the forecast in terms of residential construction will reach $25.5 billion and will carry on until 2019. Unfortunately, it is expected to fall by 8.8%.
- One of the reasons why there is an expected decline in building is mostly because of apartments.
- Not only will residential commencements continue to drop but in terms of the value of work done will continue to decline this year as well.
- As for the non-residential building, the forecast is mostly positive. The value of work done will experience an increase of 16.8% which is a jump from the previous year’s figures. Unfortunately, in the subsequent years around 2022 to 2023, it is expected that a decline of 26.8% will take place.
- Moving on to engineering construction, the forecast says that that value will reach 16.9 billion in 2018 all through 2019. This is an increase of 6.7% percent from the past year. It is expected that the growth will continue for four consecutive years. Unfortunately, there is also an expectation that a 19.1% decline will take place around the years 2022-2023.
- The main contributors to the engineering activity in Victoria are the Metro Rail which is valued $10.9 billion, the West Gate Tunnel, and the rail upgrade from Caulfield to Dandenong.
Victoria is considered the best performer of all Australia. The tougher conditions may affect the state but because of the decline in unemployment, it will continue to have a huge effect on the whole nation and the rest of the world.