Cheek by jowl: The preference for high-density living has constrained industry revenue 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 have been increasingly opting for high-density dwellings such as apartments and townhouses, limiting industry demand over the past five years. Industry revenue is expected to increase at a subdued annualised 1.1% over the five years through 2018-19, reaching $52.4 billion. This includes an anticipated contraction of 4.6% during the current year, which broadly corresponds with the projected decline in new single-unit dwelling commencements...read more.

Industry Statistics & Market Size
Revenue
$52bn
Annual Growth 14-19
1.1%
Forecast Growth 19-24
Profit
Employment
70,750
Businesses
42,900
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • The rising preference for high-density living has eroded demand for traditional housing
  • Rising house and land prices have discouraged investment in single-unit house construction
  • Despite a short-term contraction, industry revenue is forecast to increase over the next five years
  • 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. 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 has determined the most important Key Success Factors for the House Construction 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?

    Industry firms primarily 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
  • Other services
  • 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 trends
  • Industry participation trends
  • Competition trends
  • Subsidies and demand
  • 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 services
  • 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
  • Profit
  • Subcontractor and professional costs
  • Purchases
  • Wages
  • Other
  • 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
    There are no major players in this industry. This report includes analysis of other companies.
    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 (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)
  • House commencements (2010-2024)

  • 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 offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    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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