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Business turnover for the construction industry rose 3.7 per cent in seasonally adjusted terms in September, according to figures released today by the Australian Bureau of Statistics (ABS).
Annually (from September 2023–24), business turnover for the construction industry lifted by 8 per cent.
Robert Ewing, ABS head of business statistics, said: “Construction turnover has continued to rise over the last three months due to greater activity on major civil and commercial projects.”
Indeed, this activity has seen construction turnover rise by 2.2 per cent in July and 1.5 per cent in August following two consecutive falls in May and June of 0.2 per cent and 0.5 per cent, respectively.
Overall, the 13-industry aggregate showed business turnover increasing by 0.2 per cent (seasonally adjusted) and decreasing by 0.1 per cent in trend terms.
While being driven partly by commercial construction, the NAB Commercial Property Index highlighted “relatively downbeat” sentiment in the commercial property market over 3Q24.
The survey said that the index had “recovered some ground” over the third quarter; however, it continued to print in negative territory despite a pickup in sentiment.
According to NAB, confidence levels for the next 12 months also reduced amid softening business conditions and slowed economic growth, resulting in the index printing at -2 index points.
Despite still sitting in negative territory, the index did lift from -11 seen in the June quarter as property professionals noted smaller falls in capital and rent growth across the office and retail markets during the quarter.
Furthermore, the survey said that a below-average 44 per cent of property developers planned to start new projects within the next six months, with a below-average number (49 per cent) looking to start in the residential sector, but a well above-average number of 20 per cent looking to start projects in the industrial sector.
“With continued interest rate stability and expectations for the cash rate to moderate through 2025, the number of property professionals who plan on sourcing more capital to fund development, acquisitions or projects in the next six months increased to 29 per cent (24 per cent in Q2),” the survey said.
Findings from Australian Property Investor’s Property Sentiment Report Q3 2024 told an interesting story in buying intentions from investors.
The report said that respondents opting to sit out or retain a “wait and see” approach to the real estate market fell sharply over three successive quarters, falling from 39 per cent in the final quarter of 2023 to 22 per cent in the September quarter.
“Interestingly, this decline has not corresponded to a marked change in the proportion of buyers and sellers of residential property entering contracts in the past 12 months,” the report said.
“Instead, it has seen a quadrupling in those buying a commercial property (up from 3.1 per cent to 12.5 per cent in the past three quarters), with more gradual increases in those building a residential development (2.7 to 4.9 per cent), building a residential property (3.6 to 7.5 per cent), and selling a commercial property (3.0 to 6.5 per cent).
“The buying and selling of residential property is still the overwhelmingly dominant force, accounting for 34 per cent of annual transactions. But commercial property is becoming a more significant player, with more than one-fifth of respondents active in this space (20.8 per cent buying, selling or building commercial property).”
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