Outlook & forecasts

Building Industry Outlook

Building in Queensland is set to become even more challenging in 2023 as the reality of interest rate hikes, soaring costs and regulatory change sets in.

The long-running challenge of trade and material shortages will continue to hamper the delivery of construction projects. Material prices will continue to grow, albeit it at a smaller rate.

Added to the mix in 2023, will be substantial changes to the way houses must be built. The National Construction Code (NCC) changes starting in May and further changes in October, will add more complexity and cost.

Demand for new construction will continue to contract as interest rates and cost rises mean that more projects fail to get the go ahead. The industry will remain busy however, with an unprecedented backlog of work thanks to construction delays and repair work stemming from floods and storms.

Looking forward, continued population growth, the 2032 Olympics and the massive investment in the renewable energy transition will all underpin a return to strong demand.

Residential Forecast

New home building starts are set to fall back to 31,000 during 2023, a reduction of 20.2 per cent on the previous year. Detached house starts are likely to see the sharpest drop (-28.8 per cent) while higher density homes (units, townhouses etc.) are anticipated to dip only slightly (-1.3 per cent). Renovation work will continue to be the bright spot.

2023 is likely to mark a low point for home building in Queensland. A return to lower interest rates and the need to house a growing population are likely to lift new home building starts next year. Medium/high-density home building is likely to see the biggest uplift, but detached house output is also set to expand significantly.

Non-residential forecast

A marginal gain of 0.6 per cent expected for 2023 before stepping back by 2.7 per cent during 2023-24.

Most areas of non-residential construction will share in this favourable outlook. The exception being industrial building which is expected to ease off after a very strong performance.

With the 2032 Olympic Games coming to Brisbane, demand for recreational and transport projects in Queensland are likely to be quite healthy over the forecast horizon. Utilities and resources work is expected to form the remaining bulk of activity over the period to 2026-27 and it is likely that growth will be both solid and consistent in nature.