Residential Construction to Soften on the East Coast

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Friday, February 26th, 2016
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Construction materials producer Adelaide Brighton says residential construction on Australia’s east coast is likely to soften this year.

Chief executive Martin Brydon said new housing was beginning to slow in NSW and Victoria.

“That’s naturally a cycle, irrespective of bubbles and everything else,” Mr Brydon said.

“Clearly, the residential sector can’t continue at the rate it is on the east coast. That’s likely to soften over the next year or two.”

But he said an infrastructure wave was approaching and the industry had limited capacity to service both sectors.

“It’s probably neat timing,” he said.

New home markets in NSW and Victoria would be subdued in 2016, while south-east Queensland was improving, he said.  South Australia had now hit the bottom and infrastructure projects would provide demand growth this year.

Meanwhile, Western Australia and Northern Territory markets would be weaker this year.

“In aggregate terms we think we’ll see some small improvement in volumes this year over last year,” Mr Brydon said.

He added that unexpected price shocks did not change underlying demand for residential construction over time.

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