Construction supplies like steel strapping tools, lumber and cement will continue to be more in demand in Sydney due to the ongoing building boom for apartments.
CoreLogic’s analysis of Australian Bureau of Statistics (ABS) data showed that New South Wales has bucked the trend of slowing apartment construction in Victoria and Queensland. The trend in Sydney takes places despite falling prices during the first quarter of 2018.
During the last three months of 2017, the number of apartments under construction in New South Wales reached a record high. More than 68,000 units are expected to hit the market. This number also surpassed the number of construction projects in the third quarter last year and twice the number in 2012.
As more apartment projects are slated to come in the state, home-builders need to source their supplies from reputable contractors. ABS said that building approvals reached almost 16,800 during the same quarter. Since supply may have seemed to catch up with demand, first-time home buyers could find it more affordable to close a deal.
A report revealed that housing demand in Sydney has fallen 25.4 per cent across all properties, which may be the reason for falling prices as supply continues to pick up. The median price for single-family homes amounted to $890,000, while apartments registered a median price of $709,000.
However, these figures still represent a high price for many Australians that serves as another reason for lower housing demand. Experts said that the price drop in Sydney would not be as low as the situation in Western Australia, due to the city’s stable economy and employment market.
Residential property prices in Sydney may still be expensive despite falling recently, yet the overall outlook for demand among first-time home buyers should continue to support the steady home construction activity in the city.