Residential building ‘is recovering strongly’

The building of residential property in Australia weakened in the economic downturn when it was hit by a collapse in confidence, but is now recovering strongly.

This is according to Frank Gelber, chief economist and director of economics and property at BIS Shrapnel.

He wrote in a piece for the property section of the Australian newspaper that the residential market is expected to grow over the next few years.

However, Mr Gelber said that "aggressive" rises in interest rates will then bring about a downturn.

"Non-residential building faces two further years of negative growth. But that downturn will be offset by growth in residential building, with aggregate building activity remaining positive," he claimed.

Mr Gelber concluded that, in five years’ time, total construction will be 15 to 20 per cent above the level it is currently at in real terms.

His comments follow the publication of figures by the Australian bureau of Statistics, which revealed that the value of building work carried out in Australia increased by 5.7 per cent from the first quarter of the year to the second.

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Steve Douglas is the co-founder and Managing Director of Australian Taxation Services (ATS), established in Singapore in 1995.

ATS provides specialist taxation services to Australian expats living overseas and people of any nationality investing in Australian property.

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