Construction conditions favour Australia

Construction conditions favour AustraliaA falling Australian dollar, low interest rates, the slow-down in the mining sector and interest from foreign investors is creating favourable construction conditions, according to Turner & Townsend’s International Construction Market Survey 2015.The Survey analyses input costs such as labour and materials, and charts average construction costs for both commercial and residential projects in 35 markets around the world.New York City takes the top spot as the most expensive place to undertake construction activities in the markets surveyed. Sydney is positioned at number 10, with Perth ranked at 16, Melbourne at 19 and Brisbane at 20. According to Gary Emmett, senior economist for Turner & Townsend, the tide is starting to turn in Australia’s favour.”Foreign companies are looking for opportunities as a direct result of the low Australian dollar against the US dollar. The 2015 report shows that compared to 2011, it would cost overseas investors paying in US dollars 13 per cent less to construct buildings in Australia which is a significant reduction,” Emmett says.Other factors influencing the market include the low interest rate environment, which makes finance relatively cheap, stable construction costs and the winding down of construction within the mining sector, which is freeing up resources for other sectors.”Labour availability has improved significantly as a direct result of several mining projects slowing, which is creating opportunities for other industry sector,” Emmett explains.Turner & Townsend’s report says construction costs should remain fairly stable, although some residential construction trades may become increasingly difficult to source, adding pressure to costs. Foreign investors are expected to seek more opportunities here to capitalise on the favourable conditions to build projects.”Overall, it is a great time to build,” Emmett concludes.To read the report click here.