The Australian construction market is the most adversarial in the world, with high costs placing Sydney as one of the five most expensive cities in the world to build commercial, multi-unit high rises and hotels.
In global firm AECOM’s annual collection of data from more than 10,000 construction projects around the world, Sydney ranked in the top five most expensive cities for each category of development because of market conditions, including high labour costs.
The results released this morning found innovation and collaborative delivery on construction projects is needed to reduce costs and make construction more affordable.
The report also suggested the residential property market, which has recently been improving across Australia, particularly in Melbourne and Sydney, could “take up the slack” felt in the economy with the end of the resources boom.
The recovery of the housing market has been particularly evident in the apartment sector, with the report finding the rate of approvals for apartments is “well above its 20-year average”.
The new findings come as clearance rates over the weekends were lower than the recent record highs, as fewer buyers were found over the long weekend.
Australian Property Monitor’s figures indicate 69.7% of listed houses were sold in Sydney, while only 60% were sold in Melbourne.
Senior economist with the APM, Andrew Wilson, told SmartCompany it’s not unusual for the property market to “pause” over the Queen’s Birthday weekend.
“It signals the break between the late autumn and winter auctions season. Despite the fall in clearance rates compared to last weekend, we had some good results, the results in Sydney and Melbourne, which were well ahead last year’s Queens Birthday holiday results,” he says.
Over the weekend, only 245 properties were listed in Sydney and 143 were listed in Melbourne.
Despite the weekend’s lower clearance rates, Wilson says the market is still looking positive.
“There are still some positive signs that buyer activity is still strong in both housing markets.
“It’s looking to be one of the strongest winters we’ve had in a while. The market is travelling around about where it was three years ago, particularly in Sydney in terms of auction clearance rates, but now the market is looking like it’s continuing to grow,” he says.
Wilson says in 2010, despite a positive start to the year, by winter the market started to slow down, but he says this is unlikely to occur this year.
“Now we move into winter with high expectations in terms of the market continuing to move forward. We’ve also got high numbers of auctions, particularly in Melbourne, for next weekend with around 800 properties listed.
“This is a sign of more confidence in the market,” he says.
Of the properties listed with APM, the most expensive house sold for $4.15 million in the Sydney suburb of Abbotsford.