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Report reveals slump in commercial property construction

Report reveals slump in commercial property construction

Conditions in the commercial construction sector have fallen back into negative territory, according to Master Builders Association.

The association’s National Survey of Building Construction index, which measures current conditions in the non-residential building sector, fell to 46.1 in the June quarter.

Master Builders Australia CEO Peter Jones said that despite earlier optimism, the latest index shows that the anticipated recovery in commercial construction has failed to materialise, reversing the confidence present in the December 2014 and March 2015 quarters.

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“The index measuring expectations about future activity also dropped back for the second successive quarter as caution about the wider economy and fragile business confidence kept a lid on investment,” he said.

Meanwhile, China has overtaken Japan to become the leading Asia-Pacific nation for investment in commercial real estate, with volumes more than doubling in the second quarter of 2015.

According to a report by international real estate firm JLL, China’s commercial real estate transactions rose 54 per cent to US$7.9 billion in the three months to June, compared to the same period a year ago.

The liquidity in China was driven by funds seeking top-grade assets with strong yields, the report said, while sentiment improved in tier-one cities such as Guangzhou and Shenzhen.

Report reveals slump in commercial property construction
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