18/05/2004 - 22:00

Building on strength

18/05/2004 - 22:00

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CAPITAL works projects announced in the State Budget are expected to sustain the strong activity shown in the commercial building sector over the past year.

Among the capital works projects coming up for tender this year is the $142 million Central Law Court Development.

These projects are expected to sustain activity in the commercial sector, with the building market showing no signs of abating.

Commercial building tender prices have risen 8 per cent in the past quarter to reflect the higher cost of labour and materials.

In the residential sector, strong land sales and steady migration flows are predicted to underpin new residential building activity for the rest of this year. About 195,000 residential starts are expected in 2004-05, which is 5 per cent lower than 2003-04 levels.

This comes off the back of a predicted bust of the Australian property market.

While housing prices fell 14.5 per cent in Melbourne and 10.5 per cent in Sydney over the March quarter, prices in Perth fell only 1 per cent.

Colliers research manager David Cresp said the Perth figure was the result of unwinding of very strong growth in the December quarter.

“For the rest of the year Perth prices are likely to remain relatively static, but prices won’t go backwards to the extent of the eastern States,” he said.

Satterley Property Group chief executive Nigel Satterley said over-supply in Melbourne and Sydney led to the recent drop in prices.

“The house and land market is steady in WA – Perth is not overbuilt, interest rates are low, job security is good and the resource industry is continually bringing more people to WA,” he said.

Roy Weston CEO Geoff Baldwin said the Perth market hadn’t overheated in the same way as in the east and was therefore unlikely to experience the same falls.

“The Perth residential market has huge capacity to remain strong for the next number of years – the average house price is much lower, which means that the affordability factor is still there,” he said.

“The population growth is stronger here than the rest of the country, which will continue to support the market.”

Industry groups have largely welcomed changes to stamp duty announced in the State Budget, but are concerned that the changes will not come into effect until July 1.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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