Building slump

THE Master Builders Association has forecast a major downturn in commercial building, with little new private sector work being undertaken, according to its survey of building industry conditions.

The survey indicated a “two-speed” sector had emerged in Western Australia’s commercial building market, with a reduction in private sector investment not being fully offset by government spending and stimulus packages.

MBA director of housing and economics, Gavan Forster, said non-residential building in WA was coming off a historically high level of $4.1 billion in 2008-2009, and would dip to more normal figures of $2.7bn in 2009-2010.

“It will be very subdued in that market, the major work will be in the small to medium range, rather than large office buildings or large hotels so contractors will have to look in that sort of segment for work,” Mr Forster told WA Business News.

In the residential sector, the MBA survey reported sound results on the back of a re-emergence of second and third homebuyers.

Mr Forster said the performance by the housing sector was “unexpectedly strong”.

“At this time last year it was all doom and gloom, but because of the lower interest rates and government subsidies, things have been much stronger than was originally anticipated,” he said.

“For 2010, while there will be a lull in the first homebuyer market which kept things going this year, that will all fade away, but hopefully the investors in the second home market will fill the void, so we’re quite bullish about the housing side.”