Market Trends of Australia Prefabricated Buildings Industry
Increasing Demand for New Building Construction in Australia is Driving the Market
- Australia is one of the nations with the highest economic growth, and its construction industry is flourishing. As public awareness of climate change and other environmental issues continues to rise, more and more people are seeking methods to live sustainably, leading to numerous new construction trends in Australia. One of Australia's most recent construction trends is the preference for modular construction techniques. Off-site construction methods like modular construction include building prefabricated modules in a factory setting before transporting them to the job site.
- The latest official data showed a significant decline in approvals in April. Rising costs of building materials and labor are pulling down new housing permits. According to the Australian Bureau of Statistics, after a decrease of 19.2% in March 2022, the number of residences permitted in Australia further decreased by 2.4% in April 2022. Approvals for detached homes increased by 0.5% to 10,077, while apartments and townhomes decreased by 6.1% to 4,701.
- As the industry returned to normal levels after the home builder-fueled boom in activity, total approvals witnessed a decline of 32.4%, with detached homes and apartments experiencing declines of 33.7% and 28.7%, respectively. By 2032, 163,400 dwellings were estimated to be less than what was previously predicted by the National Housing Finance Investment Corporation. The value of new residential construction increased by 4.4% to USD 6.054 billion, while renovations increased by 6.6% to slightly over USD 1 billion. Buildings other than homes saw a 30% decline, reaching a value of USD 4.35 billion.
Understand The Key Trends Shaping This Market
Download PDF
Increasing costs of construction in Australia
- The average cost to build a home in Australia increased by over USD 94,000 in just 15 months. Mortgage holders across the country also felt the effects of the increase. Housing costs played a significant role in the inflation data that drove the Reserve Bank of Australia to raise interest rates by 1.5% over the past three months. According to an analysis of the building approvals data from the Australian Bureau of Statistics, the average cost of a new house permitted in the country's private sector in May 2022 was USD 413,436.
- In 2023, with an increase of 23.7% over the 12 months, residential property values experienced their highest yearly growth. Due to historically low borrowing rates and government assistance, Australia's real estate industry experienced exponential growth. Price increases were seen in all the major capital cities, with Hobart (+29.8%), Canberra (+28.8%), Brisbane (+27.8%), Sydney (+26.7%), and Adelaide (+23.9%) seeing the highest yearly increases. In the last 12 years, Melbourne (+20.0%) has seen the most considerable annual growth, followed by Perth (+15.7%) and Darwin (+13.0%). Due to the increase, Australia's real estate market was valued at USD 9.9 trillion, with the typical price of residential properties rising by another USD 44,000 to USD 920,100 nationwide.
- The government has been investigating housing affordability and supply due to high prices. The results are anticipated to be public this year. With many Australians being shut out of the real estate industry and others facing lifetime loans of millions of dollars, the price increase is causing a housing catastrophe.
