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BIS: New apartment building to halve

Monday August 21, 2017

Australian Financial Review

The wave of cranes will disappear from capital city skylines over the next three years with high-rise apartment construction to halve and overall building to decline 17 per cent, stripping out a key ­support of economic growth, according to BIS Oxford Economics.

National building starts reached peak levels over the past two years, with $107.3 billion of work started across the commercial and residential sectors in 2015-16 and a similar level expected for last financial year.

The peak levels are 22 per cent above those at the end of the ­resources boom in 2012-13, the ­researcher found.

“Overall, we expect 2017-18 will be the peak in high-density residential completions, but that part of the market will slump around 50 per cent in the subsequent two years,” said Robert Mellor, ­managing director of BIS Oxford Economics. “By contrast, a milder decline is forecast for detached houses. The saving grace is that the floor in residential commencements is likely to be higher than in previous busts.”

Subscribers to the Financial Review can see the full article here.

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