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Master Builders predicts "mixed outlook" for construction


Despite the waves of confidence and prosperity currently circulating in Australia's property market, investors know that things can change quickly. An inherently risky undertaking, property investment requires careful, ongoing analysis of economic trends and factors, along with the use of property valuation solutions.

This was brought to light in a recent announcement from Master Builders Australia, which forecast a mixed outlook for Australia's construction sector through to 2016-17. Peter Jones, chief economist at Master Builders, said that the industry should nonetheless remain "upbeat" for the future.

"Master Builders remains confident that prospects for the building industry will remain positive despite the slight 1.2 per cent seasonally adjusted fall in the ABS construction work done data for the June quarter," he said.

"The easing in engineering construction forecast by Master Builders Building and Construction Industry Forecast was confirmed by the 3.1 per cent seasonally adjusted fall in June. However, this was largely offset by building work done in residential building and commercial construction which rose 1.5 per cent seasonally adjusted in the same period."

According to Master Builders' forecast report, the value of residential building work done is expected to show strong growth over the three-year measurement period. Growth over 2013-14 is estimated at 6.4 per cent, with this figure set to rise further by 30 per cent over the forecast period.

This will see the value of completed residential work increase from $51 billion in 2013-14 to $68 billion by 2016-17.

Non-residential building work, on the other hand, enjoyed estimated growth of 5.9 per cent over the past year. The outlook for the future isn't as positive however, as Master Builders predicts growth in the sector "may fail to lift appreciably" over the forecast period.

As ever, investors and developers dipping into the market need all the technological assistance they can get when making judgments - which makes tools such as investment appraisal software a necessity.

Date Published: 08 Sep 2014

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