While the Apartment Sector Struggles, Housing Boom Continues

Over the past year, we have seen how the pandemic changed the course of our lives – including industries all over the world. If there’s one industry that really continued to thrive even during the extremely challenging times, it would have to be the building and construction industry. The biggest driver of economic growth without a doubt is employment. And because a country needs to consistently deliver projects that will produce significant contributions to the growth of the economy, building infrastructure that will increase productivity is such an important factor in creating more jobs. Recent studies have shown that Victorians spent a record of $13.3 billion in the past financial year. The data showed figures from the New Australian Bureau of Statistics that state’s home builders topped the recorded spending in 2019-2020. Prior to the pandemic, $12.8 billion spent was recorded. The even more excellent news is, Housing Industry Association predicts that the industry will continue its streak until the end of the year. The Andrews Labor government recently opened 10,000 new jobs for skilled workers as new projects will be started. The majority of these jobs refer to building projects, including residential properties. The HomeBuilder grants scheme opened doors for more opportunities for Australians to build their houses, which resulted in an increase in interest coming from Victorians and those coming from different parts of Australia. However, there’s a projected slowdown that could possibly take place by March 2022. There’s already been a 2 percent drop in housing approvals in June despite the apparent building boom that the industry has been experiencing. This is clear evidence of the slowdown that is bound to happen pretty soon. The building boom was a key element for the economy’s successful recovery, but everything has to end at some point. Fortunately, experts point out that seems like home renovations will remain beneficial to the economy as more applications and loans are approved. While there is a housing boom happening, concerns about Victoria’s struggling apartment construction sector continue as an apparent decline is being seen. Apartment construction was once a strong sector, but there has been a reduced demand especially during the pandemic. Apartment construction is a significant driver of employment and a contributor to the market. However, it hasn’t been a reliable sector in recent months. International migration from young people who move to the city for a job opportunity or to go to a university is the main reason for the astounding demand, but with the pandemic basically shifting our urgencies, the decrease was palpable. Now that the lockdown in Victoria has been extended beyond the previously announced date, which was Thursday this week, September 2, the industry is worried about the cost. The Building and Construction Industry has been required to implement certain “COVID Surveillance testing requirements” on all sites. The sector must take all necessary precautions as seriously as possible to make it safe and remain open. The extension timeline is expected to be announced this week.