Changing the storey: High-density living preferences curb industry demand growth

Home ownership is a cornerstone of the great Australian dream, providing financial and emotional security, and often representing the largest investment an individual will make. Businesses in the House Construction industry build new low-density dwellings, or renovate and repair existing homes. However, homebuyers are increasingly opting for high-density dwellings such as apartments and townhouses. Industry revenue is projected to increase by an annualised 1.8% over the five years through 2017-18, to total $43.8 billion. This includes a contraction of 3.6% in the current year, which broadly corresponds with the expected decline in new dwelling commencements...read more.

Industry Statistics & Market Size
Revenue
$44bn
Annual Growth 13-18
1.8%
Forecast Growth 18-23
Profit
Employment
69,850
Businesses
43,150

Industry Threats & Opportunities

  • High-density living preferences have limited the benefit of population growth on industry demand
  • Rising house and land prices have discouraged investment in single-unit house construction
  • Despite the short-term contraction, industry revenue is forecast to rebound from 2019-20
  • Industry Report - Industry Locations Chapter

    The distribution of industry activity, as measured by the value of work done on single-unit housing construction, displays a heavy concentration in construction in Victoria and Western Australia and a disproportionately small share of activity in New South Wales and Queensland. This variation principally reflects regional differences in housing preferences due to lifestyle, land prices and other considerations and the variation is influenced by short-term demographic and economic trends between states. There is greater propensity to construct multi-unit dwellings, such as apartments and condominiums in inner-urban regions of Sydney and the coastal retirement and tourism regions such as the Gold Coast and Noosa...purchase to read more.

    Additional Insights for the House Construction Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the House Construction Industry are

  • Membership of an industry organisation
  • Access to highly skilled workforce
  • Having a high prior success rate (including completed prior contracts)
  • IBISWorld analysts also discuss how external factors such as Dwelling commencements and Mortgage affordability in the House Construction industry impact industry performance..

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    What's in this report

    What is the House Construction Industry?

    This industry consists of companies that mainly construct houses (excluding multi-unit apartments and townhouses) or carry out alterations, additions, renovations or general repairs to houses. The industry also includes operators that organise and manage these activities as the prime contractor.

    Industry Products
  • New housing construction
  • Alterations, additions, renovations and improvements
  • Housing repairs and maintenance
  • Industry Activities
  • House building
  • House alteration, renovation and general repair
  • Prefabricated house on-site assembly, erection and installation
  • Project management
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Dwelling commencements
  • Mortgage affordability
  • Residential housing loan rates
  • Number of households
  • Residential housing prices

  • Current Performance
  • Profit and employment
  • Subsidies boost demand
  • Post-flood reconstruction
  • Competition
  • Chart: Revenue Growth

  • Industry Outlook
  • Profitability improves
  • Factors driving demand
  • Table: House Construction Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - House Construction Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Residential Property Operators
  • Central Government Administration
  • State Government Administration
  • Consumers

  • Key Selling Industries
  • Clay Brick Manufacturing
  • Farm and Construction Machinery Wholesaling
  • Hardware Wholesaling
  • Machinery and Scaffolding Rental
  • Ready-Mixed Concrete Manufacturing
  • Timber Wholesaling

  • Products & Services
  • New housing construction
  • Alterations, additions, renovations and improvements
  • Housing repairs and maintenance
  • Other
  • Chart: House Construction Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Private homebuyers
  • First-home buyers
  • Property developers and speculators
  • Public sector
  • Chart: Major Market Segmentation for the House Construction Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs House Construction

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the House Construction Industry

  • Industry Globalization
    Metricon Group Pty Ltd, ABN Corporate Services Pty Ltd, BGC (Australia) Pty Ltd, Simonds Group Limited,
  • Table: Metricon Group Pty Ltd - financial performance
  • Table: ABN Corporate Services Pty Ltd - financial performance
  • Table: BGC (Australia) Pty Ltd - financial performance
  • Table: Simonds Group Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the House Construction Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the House Construction Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • House commencements (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Dwelling Commencements
  • Dwelling commencements information records when contractors receive municipal approval to commence construction of a building.
  • First Home Owner Grant (Fhog)
  • A scheme that provides state funding for eligible first-home buyers in the form of a non-means tested grant towards the purchase of a home.
  • Mortgage
  • Legal contract through which a financial institution (bank, building society etc.) lends money at interest in exchange for holding the title on the borrower's property.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s House Construction market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on House Construction:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The House Construction market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on House Construction, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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