The number of new projects recorded by CoreLogic for the Cordell Construction Monthly Report Over March was 1,707—4% higher than in the previous month and 4.6% lower than the five-year monthly average of projects.
The construction value of new projects captured over the month was $12.8bn, up from $12.6bn in February.
As with the previous month, the highest construction value segment received within new development applications was in the apartment and unit space, accounting for almost 28% of the combined value of development applications captured over March.
Eliza Owen, commercial property research analyst at CoreLogic, observed that while apartments represented the highest value construction segment in new projects over March at $3.6bn, this is significantly lower than the $6.1bn worth of construction in new apartment projects registered in February.
“The continued strength in the apartment development space comes from a combination of long-term confidence in east coast cities, particularly close to the inner city suburbs, and calls for more housing to address a reported under-supply – particularly in social and affordable housing,” she said.
Citing an example, Meriton recently purchased the City of Sydney council depot site in Zetland. The 1.1 hectare site has the potential to accommodate approximately 300 apartments. This recent acquisition reinforces Meriton’s confidence in the suburb, in addition to their acquisition of the City Ford site on Elizabeth Street in 2017.
“Although some developers continue to be confident in the Sydney unit market, joint venture projects and state government participation in housing is starting to rise in an effort to deliver affordable housing in the cities,” Owen said.
The Victorian Department of Health and Human Services is currently seeking expressions of interest from the social housing sector and private developers who’re willing to participate in a joint venture development. The partnership will enable the delivery of more affordable, mixed housing on vacant, state-owned land throughout Victoria.
“The program will start with 52 vacant sites that run from Melbourne’s western suburbs to Geelong,” CoreLogic said.
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