Construction plays a critical role in Australia, especially when it comes to residential developments across the country. It's good news, then, to hear that Australian Industry Group and Housing Industry Association research has found strong growth in residential construction – and it's set to continue.
For those interested in property Adelaide, it may be time to sit up and take notice.
In a report released in early July, the two organisations found that apartment building rose 6.0 points in June to reach 53.0, and house building returned to expansion, climbing 3.4 points to reach 51.7.
HIA Chief Economist Harley Dale explained that the report reflects the current nature of the economy: Residential construction is "doing the heavy lifting".
"Revving up the infrastructure investment engine is crucial, as we have been highlighting for a considerable time now, but think where the economy would be without the substantial impetus provided by healthy new home building activity," he said.
However, data from BIS Shrapnel found that excess supply could dampen the Adelaide market, coupled with "sluggish local economic conditions". Senior Manager Angie Zigomanis noted that the apartment construction boom is concerning, as it's "creating a disconnect in the supply balance between detached houses and units". In turn, this means there's a difference in price outlook.
"Most capital cities are building apartments at record rates, driven by investor demand."
Mr Zigomanis finished by noting that strong tenant demand will be important to support the value of these new apartments being constructed. Investors planning to proceed with apartment purchases will need to consider these changing conditions, and how an expert can help.
Speak to the team at Ray White today if you'd like to find out more about property in Norwood, Prospect or other areas throughout Adelaide.