At a time when the economy has faced its fair share of turmoil, there’s one sector that has gone above and beyond the call of duty – construction. New homes have been built across the entire country, bringing new hope at a time when the national balance sheet hasn’t been looking too healthy.
Bringing new homes to the market brings all sorts of advantages to the economy. Not only does it provide new job opportunities, but also delivers quality housing to the rising population – two factors that are growing in importance for Australia.
Australia’s economic powerhouse
Construction is so crucial to the country that the Housing Industry Association (HIA) recently described it as “the powerhouse of the Australian economy”. In a recent media release, the HIA revealed that new dwelling commencements reached a record high during the three months to March, and have steadily increased over the past 12 months.
To put the figures into perspective, the Australian Bureau of Statistics (ABS) revealed that in trend terms, the value of building work completed increased 4.4 per cent between the March quarters of 2015 and 2016. This was mainly the result of residential building, which rose 10.3 per cent over the same period, offsetting falls in non-residential activity.
HIA data shows that during the 12 months to March, new dwelling commencements were up 13.1 per cent in Queensland as more property developments on the Gold Coast got underway.
Delivering new and varied house types
As the HIA noted, there are some types of housing that are proving more popular than others at the moment. However, all building work is good news for the economy, especially if it means that Australians have improved access to affordable homes.
“Based on the latest results, detached house commencements have peaked for the cycle, but remain well above their historical average,” said HIA chief economist Harley Dale.
“Meanwhile, commencements of ‘multi-units’ continue their stratospheric rise exceeding the number of detached houses over the last year.”
This shows a shift in the type of houses that people are demanding, and that builders are willing to construct. Because multi-units have advantages in the fact can house larger numbers of people in a smaller area, making them particularly appealing in regions where high-density living is the norm.
Looking to the future of construction
Although the future of Gold Coast property development looks optimistic at the moment, concerns are already emerging that this might not be the case for much longer. Given how important building is to the national economy, it’s essential that whatever steps necessary are taken to ensure that current levels can be maintained.
Dr Dale emphasised the need for current policy settings to be maintained, as this would help give the greatest assurances that the healthy construction levels of recent months can continue for a while longer yet.
“What goes up will come down and there is unprecedented uncertainty regarding the nature and magnitude of the down cycle that will unfold over 2016-17 and 2017-18,” Dr Dale commented.
He warned of the risks of tampering with current policy, suggesting that the present settings seem to be working and supporting growth. Builders need all the help they can get at the moment, and the construction data that’s recently emerged seems to indicate that it makes economic sense for it to continue.
Find your next Gold Coast investment property
Making a property investment on the Gold Coast involves weighing up all sorts of factors, including whether to buy a new or existing property. We have plenty of new-build projects on our books and are more than happy to talk you through your various options.