Residential development approvals in ACT have taken a significant dip in the first half of the year probably due to the affordability of homes.
It is likely that the ACT Government’s recent budget, which provides further stamp duty concessions on homes less than $1m for first home buyers and downsizers, including on off-the-plan apartments and townhouses will fan the demand somewhat. These concessions are due to commence in July 2024. The ACT Government also plans to funnel significant funds into social and affordable housing in the next 12 months. When considering all this together the predicted population growth from 470,000 (December 2023) to 530,000 (December 2028) people, we believe the stagnant residential sector will soon recover its vigour.
The ACT Budget for FY24/25 continues to fund significant civil projects such as roads and district playing fields, and heavily invests in road upgrades, and the commencement of design for projects in future financial years. We believe the civil sector will remain heated and continue its struggles with resourcing projects and will have to continue to seek personnel and specialist trade contractors from outside of the Greater Capital Region.
Both the Federal and ACT Governments have committed significant funds to commercial, educational, health and social infrastructure projects in Canberra which will span several financial years for the next five years. Consequently, it is expected that the commercial sector will run at capacity or somewhat above its normal capacity. This is likely to pose procurement, staffing and delivery challenges, and introduce financial risk on those projects. The success of projects will depend on the Main Contractors’ ability to procure resources from outside of the Greater Capital Region, and their ability to secure sufficiently experienced people to deliver those projects. This will therefore exacerbate the shortage of construction personnel in Canberra.
Detailed data for each Australian state can be found in the 2024 Handbook & Cost Guide.
