The residential building market is strong but peaking, and looks set to fall back over the coming year, according to BIS Shrapnel . Their latest economic forecast has shied away from labelling this a “slump” for the building and construction industry, however, predicting strong growth during 2003/04 in non-residential and commercial construction.
Supply and demand conditions across the residential market remain strong despite oversupply in some areas, such as those affected by the First Home Owners Grant, but BIS Shrapnel has warned of a sharp shift in conditions for suppliers of residential building markets.
Interest rates, another important factor in the residential building market, will probably rise another 0.5% before remaining stable for the next 18 months.
According to Senior Economist Matthew Hassan, there will be a shift into investment in non-residential property over the next five years, driving a building and construction industry upswing. A long-term decline in CBD commercial space will also produce a boom in commercial property over this period.
BIS Shrapnel that there will be growth in major engineering and public infrastructure projects, with investment spending delayed over the last 2-3 years set in motion again.