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Home approvals still below 1994 peak

ALTHOUGH there has been a residential building approvals surge in recent months, approvals still remain below the 1994 peak.

The November issue of the BankWest Review of the Western Australian Economy said monthly trend building approvals have already peaked and are unlikely to climb further.

The 1994-95 historical high in construction per capita is likely to prove to be an aberration, the review said.

“The State’s economy was growing rapidly in 1994, while the downturn in construction in the early 1990s created a pent-up demand that helped to fuel strong construction by the middle of that decade,” it said.

“The quarterly real value of residential building activity has risen from a late 1996 cyclical low of less than $400 million to $544 million in the June quarter of 1999.”

With time running out for people wanting to beat the GST, the review indicated construction activity is likely to pull back next year.

The review said the 11.5 per cent increase in residential work has been offset by a 14 per cent decline in non-residential work.

A report compiled by Construction Research of Australia showed while the building industry is booming, the bulk of new building demand is going to the big players in the industry.

In October 1998, the top three residential builders – J-Corp, BGC’s National, Cromlec and Commodore Homes, Dale Alcock’s Webb & Brown-Neaves, Dale Alcock, APG and the Homebuyers Centre – had 35 per cent of the market. A year on this has increased to 37 per cent of the market.

Combined, the top three builders had revenue in excess of $480 million for the twelve months to 30 October out of a total revenue poll of $1.7 billion, the report indicated.

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