Australia’s building market is forecast to decline over the next three years, according to a recent report.

In its Building in Australia 2017-2032 report, BIS Oxford Economics notes that national building starts peaked in 2015/16 at $107.3 billion. This figure is up 22 percent since the end of the resources investment boom in 2012/13.

While a similar value of commencements is estimated for 2016/17, the report forecasts a cumulative 17 percent decline in the real value of commencements over the next three years, up until 2020. This is in large part due to a drop in residential starts.

“The record-breaking residential building boom is already turning, offsetting growth in starts for non-residential building through 2016/17,” says Adrian Hart, associate director of Construction, Maintenance and Mining at BIS Oxford Economics.

“Over the next two years, the fall in residential building starts will accelerate sharply, particularly in the investor-driven apartments segment, as supply catches up to underlying demand.”

The BIS expects the total residential market to fall by approximately 31 percent, while high-rise apartment construction is predicted to fall by close to 50 percent.

Contrastingly, the report forecasts that non-residential building commencements will peak over the next two years. This spike follows a cumulative increase of 25 percent over the past two years. However, this growth is expected to ease sooner rather than later.

“With the exception of offices, transport building (eg. railway stations and airport terminals), health and education, most other non-residential building segments are expected to experience flat or declining commencements [in] activity over the remainder of the decade,” says Hart.