Despite the Victorian construction industry continuing to experience a high level of activity across several of its sectors, the industry also continues to be plagued by factors, including, but not limited to building company insolvencies, skilled/unskilled labour shortages, material price adjustments, prolonged construction timeframes, increased fees and charges, etc. On the positive side, there are signs that material prices, while continuing their overall increasing trend, are showing signs of moderating and steadying.  

The infrastructure sector, as it has successfully been doing for the past few years, continues to drive the industry at large, with its project sizes and high levels of activity. The general housing sector, while remaining reasonably stable, is struggling and continues to fall well short of the government’s target numbers for the decade ahead. Substantial insurance increases within the overall residential sector, are anticipated to come into effect within the next few months and this will place additional unwanted upward pressures on an already struggling sector.

Construction activity within the general apartment sector, is anticipated to remain steady, but slightly subdued. As noted in the last quarter, there continues to be an ongoing and increasing appetite and positiveness towards ‘Build to Rent’ type developments. In addition, there also appears to be a growing level of interest, in respect of the refurbishment of suitable existing Melbourne CBD office buildings, for potential “change of purpose” type developments (e.g. residential apartments).

Construction activity within the industrial, health and aged care sectors continue to remain strong and positive. Activity within the retail and hotel sectors, while being relatively flat, are showing early signs of potential positive upward movement in the year ahead.

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Detailed data for each Australian state can be found in the 2024 Handbook & Cost Guide.