In total, 72 per cent of the cranes across the country are at residential sites and according to RLB’s report, since 2012 residential activity undertaken in Australia has increased in volume terms by 44 per cent, or $24 billion, against a drop in engineering activity of 36 per cent.
“A significant number of cranes observed for the first quarter of 2019 are a direct result of this construction shift, fuelled primarily by the trend in dwelling intensification across the country,” the RLB report says.
For Melbourne, the Crane Index jumped 16 per cent to a record high of 191. Across Melbourne, 105 cranes were added to projects and 75 were removed, increasing crane numbers to a record 222.
The report says construction work done rose 15 per cent in chain volume terms for calendar 2018, with increases recorded for all sectors of housing, civil, education and engineering projects.
The main sites in Melbourne are at 380 Melbourne in the CBD, St Boulevard in St Kilda, 1060 in Dandenong, Port Melbourne, East Brunswick Village, Northumberland in Collingwood, Pace of Carnegie and Flinders Gate and Queens Place in the CBD.
More cranes are tipped to be erected as the office boom shows no sign of slowing down.
Cushman and Wakefield’s latest office report says any space in Melbourne that does become available is often quickly secured by internal tenant expansions, making it hard for new entrants and external firms to secure expansion space.
As a result of the tight conditions, even less desirable office spaces have been securing tenants on landlord-favourable terms.
For Sydney, while the $8 billion Barangaroo development remains busy with Crown Resorts’ new site taking shape, the focus for construction is at Circular Quay.
The demand for new office developments comes from the booming leasing market.
According to JLL, healthy occupier demand in the office leasing market across the Asia Pacific has helped the region’s property sector maintain a strong performance in 2018. While leasing volumes were stable in the final quarter of 2018, a strong first half helped push the annual total to a record high.
JLL’s head of research – Asia Pacific, Dr Megan Walters, said despite mounting China-US trade pressures, Asia Pacific’s growth prospects still remain healthy as domestic demand and supportive policies serve to buffer against challenges from weakening global trade.
JLL’s managing director – NSW, Daniel Kernaghan, said the Sydney property market was facing some challenges in the residential sector, but the office and industrial sectors were offering solid growth prospects in 2019, albeit not at the strong levels of the past couple of years.
“It’s significant that, in the final quarter of 2018, the Sydney CBD office vacancy rate decreased by 0.7 percentage points to 4.1 per cent – the lowest level since 2000,” Mr Kernaghan said.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.