2011 construction outlook breakfast. victorian economic update - melbourne construction outlook...

2011Construction Outlook

Breakfast

Victorian Economic Update - Melbourne Construction Outlook Breakfast

Kim Wells MP, Treasurer of Victoria

27July 2011

Strong population growth…

Source: Australian Bureau of Statistics

0

250

500

750

Total change in population 2000 to 2010

'000 Persons

Melbourne Sydney Brisbane Perth Adelaide

Victoria remains the national leader in terms of building approvals


10

20

30

40

Aug-95 Aug-97 Aug-99 Aug-01 Aug-03 Aug-05 Aug-07 Aug-09 Aug-11

per cent

0

2

4

6'000

Share of Aus total (LHS) Trend (RHS)

Also reflected in dwelling commencements


0

10

20

30

40

50

Jun-95 Jun-97 Jun-99 Jun-01 Jun-03 Jun-05 Jun-07 Jun-09 Jun-11

per cent

3

6

9

12

15

18'000

Share of Aus total (LHS) Number ('000, RHS)

Victoria’s strong home-building performance expected to continue

Source: HIA Economics, October 2011

0

10

20

30

40

50

60

2008-09 2009-10 2010-11 (e) 2011-12 (f) 2012-13 (f)

'000

Victoria NSW Queensland

House prices continue to be flat in recent quarters

Sources: Australian Bureau of Statistics, Real Estate Institute of Victoria and RP-Data-Rismark

All figures in per cent terms

ABS REIV RP-RISMARK

June 2010 2.9 8.5 0.4

September 2010 -1.8 0.9 1.0

December 2010 1.5 (revised) 6.9 0.8

March 2011 -1.6 (revised) -6.0 -1.8

June 2011 -0.1 5.4 -1.8

Recent volatility in the AUD has led it to fall slightly below parity

Source: Reserve Bank of Australia, as at 30 September 2011

0.4

0.6

0.8

1.0

1.2

Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11

AUD/USD month end

Victoria now has a much more robust and diversified economy and remains resilient

0

6

12

18

Manufacturing Finance & insurance Prof, scientific & tech Health care & socialassist

per cent of total gross value added

1994-95 2009-10


While the residential sector is flat, the non-residential sector is improving modestly

-40

-20

0

20

40

60

80

Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11

per cent

Housing finance commitments (excl. refinancing)* Commercial finance commitments*

*Year-on-year growth (3 month rolling sum) Source: Australian Bureau of Statistics

Victorian economic projections

All units in per cent

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Actual Forecast Forecast Forecast Forecast Forecast

Real GSP 2.0 2.50 3.00 2.75 2.75 2.75

Employment 2.8 3.5* 1.75 1.75 1.75 1.75

Unemployment rate 5.5 5.1* 5.00 5.00 4.75 4.75

Consumer price index 2.1 3.3* 2.75 2.50 2.50 2.50

Wage price index** 2.8 3.8* 3.75 3.50 3.50 3.50

Population 1.8 1.70 1.50 1.50 1.50 1.50

2011-12 Budget projections

Source: Australian Bureau of Statistics, Department of Treasury and Finance

*Labour market, consumer price index and wage price index data are actual outcomes for 2010-11**Covers private and public sector wage rates. Incorporates nominal wage increases for labour of unchanged quality, plus some productivity improvements which cannot be fully measured

Housing Initiatives

Housing initiatives

Government action addressing housing affordability:• Land transfer duty for first home buyers was cut by 20 per cent on

1 July 2011• First Home Bonus and Regional Bonus extended until 30 June 2012• The pensioner and concession card holder stamp duty concession

threshold was increased from $440,000 to $750,000, and eligibility extended to holders of a Commonwealth Seniors Health Card

• Stamp duty exemption for young farmers purchasing their first farmland valued up to $300,000

These initiatives have already benefited approximately 3,200 Victorian families since taking effect on 1 July 2011.

Planning Reforms

Planning Reforms

Overarching Metropolitan Planning Strategy• New outcomes-based Metropolitan Planning Strategy to manage

Melbourne’s growth into the future

Streamlining Planning Processes• Ministerial Advisory Committee to review the Victorian planning

system and recommend improvements

Planning ReformsGrowth Areas• GAIC – deferment and works-in-kind • Provide development-ready land• Process for Logical Inclusions to the UGB

Urban Renewal• Established the Urban Renewal Authority to focus on strategic

development sites• Facilitating other key urban renewal projects

Victorian Economic Update - Melbourne Construction Outlook Breakfast

Kim Wells MP, Treasurer of Victoria

27July 2011

Overview & Analysis of the Australian

Construction IndustryRob Wild

Cordell Information CEO

PROJECTS IN PLANNING

Projects in Planning - National

Number of

projects

Value of

projects ($bn)

FY07/08 FY08/09 FY09/10 FY10/1110,000

12,000

14,000

16,000

18,000 16,327

15,037

13,126

16,679

FY07/08 FY08/09 FY09/10 FY10/11$200

$250

$300

$350

$400

$310$329 $337

$390

# of Projects in Planning - Construction Types – National

FY07/08 FY08/09 FY09/10 FY10/110

1,000

2,000

3,000

4,000

5,000

6,000

CIVIL ENGINE

COMMERCIAL

COMMUNITY

FLATS & UNITS

INDUSTRIAL

MINING

$(Billions) of Projects in Planning – Construction

Types – National

FY07/08 FY08/09 FY09/10 FY10/11$0

$30

$60

$90

$120

$150

$180

CIVIL ENGINEERIN

COMMERCIALCOMMUNITY

FLATS & UNITS

INDUSTRIAL

MINING

# of Projects in Planning - State

FY07/08 FY08/09 FY09/10 FY10/110

1,000

2,000

3,000

4,000

5,000

6,000

NSW

NT

QLD

SA

TAS

VIC

WA

PROJECTS IN CONSTRUCTION

Projects in Construction - National

FY07/08 FY08/09 FY09/10 FY10/1110,000

14,000

18,000

22,000

15,83914,804

20,599

16,792

FY07/08 FY08/09 FY09/10 FY10/11$50

$100

$150

$113$105

$112

$145

Number of

projects

Value of

projects ($bn)

# of Projects in Construction – Construction Types – National

FY07/08 FY08/09 FY09/10 FY10/110

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

CIVIL ENGINE

COMMERCIAL

COMMUNITY

FLATS & UNITS

INDUSTRIAL

MINING

$(Billions) of Projects in Construction – Construction Types – National

FY07/08 FY08/09 FY09/10 FY10/11$0

$10

$20

$30

$40

$50

$60

$70

$80

CIVIL ENGINEERIN

COMMERCIAL

COMMUNITYFLATS & UNITS

INDUSTRIAL

MINING

# of Projects in Construction - State

FY07/08 FY08/09 FY09/10 FY10/110

1,000

2,000

3,000

4,000

5,000

6,000

7,000

NSW

NT

QLD

SA

TAS

VIC

WA

PROJECTS DEFERRED

Deferred Projects - National

FY07/08 FY08/09 FY09/10 FY10/110

3000

6000

2645

5042

37133261

Number of

projects

Value of

projects ($bn)

FY07/08 FY08/09 FY09/10 FY10/11$0

$50

$100

$37

$87

$54 $52

# of Deferred Projects – Construction Types - National

FY07/08 FY08/09 FY09/10 FY10/110

200

400

600

800

1,000

1,200

1,400

1,600

CIVIL ENGINE

COMMERCIAL

COMMUNITY

FLATS & UNITS

INDUSTRIAL

MINING

$(Billions) of Deferred Projects – Construction Types - National

FY07/08 FY08/09 FY09/10 FY10/11$0

$5

$10

$15

$20

$25

$30

$35

CIVIL ENGINEERING

COMMERCIAL

COMMUNITY

FLATS & UNITS

INDUSTRIAL

MINING

# of Deferred Projects- State

FY07/08 FY08/09 FY09/10 FY10/110

400

800

1,200

1,600

2,000

NSW

NT

QLD

SA

TAS

VIC

WA

PROJECTS ABANDONED

Abandoned Projects - National

FY07/08 FY08/09 FY09/10 FY10/111000

2000

3000

2061

2673 27502950

FY07/08 FY08/09 FY09/10 FY10/11$0

$30

$60

$16$19

$58

$26

Number of

projects

Value of

projects ($bn)

#of Abandoned Projects – Construction Types - National

FY07/08 FY08/09 FY09/10 FY10/110

200

400

600

800

1,000

1,200

CIVIL ENGINE

COMMERCIAL

COMMUNITY

FLATS & UNITS

INDUSTRIAL

MINING

$(Billions) of Abandoned Projects – Construction Types -National

FY07/08 FY08/09 FY09/10 FY10/11$0

$5

$10

$15

$20

$25

$30

$35

$40

CIVIL ENGINEERING

COMMERCIAL

COMMUNITY

FLATS & UNITS

INDUSTRIALMINING

VICTORIA

VIC Planning – Construction Types by Financial Year

FY07/08

FY08/09

FY09/10

FY10/11

FY07/08

FY08/09

FY09/10

FY10/11

FY07/08

FY08/09

FY09/10

FY10/11

FY07/08

FY08/09

FY09/10

FY10/11

FY07/08

FY08/09

FY09/10

FY10/11

FY07/08

FY08/09

FY09/10

FY10/11

CIVIL ENGINEERING COMMERCIAL COMMUNITY FLATS & UNITS INDUSTRIAL MINING

0

500

1000

1500

2000

2500

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

Volume $ Value billions

PROJECTS OF NOTE: NEW

North East Link – $6bn; Regional Rail Link – $5.8bn EGate – $5bn; Moonee Valley Racecourse Dev – $1.25bn

VIC Construction - Construction Types by Financial Year

PROJECT OF NOTE ENTERING CONSTRUCTION STAGE:

Hudson at Upper West Side, Residential Development Stage 1 – $180m

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

CIVIL ENGINEER-ING

COMMERCIAL COMMUNITY FLATS & UNITS INDUSTRIAL MINING

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9


VIC Deferred – Construction Types by Financial Year

PROJECTS OF NOTE DEFERRED:

The Point Estate Residential and Waterways Development – $330m Bourke Junction South East Stadium Precinct Docklands South

Tower – $300m

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

CIVIL ENGINEER-ING


0

50

100

150

200

250

300

$0

$1

$2

$3

$4


VIC Abandoned - Construction Types by Financial Year

PROJECTS OF NOTE : ABANDONED

Monash Village Student Accommodation – $300m

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

FY07/0

8

FY08/0

9

FY09/1

0

FY10/1

1

CIVIL ENGINEER-ING


0

50

100

150

200

250

300

350

400

$0

$1

$2

$3


Planning 20%

In summary for Australia – 10/11 v’s 09/10:

Construction 20%

Deferred 10%

Abandoned 55%

Overall, Vic looking pretty good!

The Housing 100For 2010/11

Graham WolfeHIA Chief Executive Association

HIA-COLORBOND® steel Housing 100 – 2010/11


Starts

2010/11 51,903

2009/10 59,509

Market Share

2010/11 33 per cent

2009/10 36 per cent

Revenue*

2010/11 $13,613 m

2009/10 $13,697 m

Main Housing Activity

Detached Houses 77 per cent

Multi-units 23 per cent

Housing 100 at a glance

*Estimated revenue earned from sales of housing only. Excludes land.


Company2010/11 2009/10 2010/11 2009/10

1 3 Metricon Homes 3,060 3,2142 2 Alcock/Brown-Neaves Group 2,668 3,5263 1 BGC (Australia) 2,435 4,3924 4 Simonds Group 2,317 2,3925 10 Hickory Group Pty Ltd 2,003 1,2746 7 Porter Davis Homes 1,824 1,5647 5 Henley Properties 1,748 1,8818 13 Brookfield Multiplex 1,618 7729 6 JWH Group 1,318 1,65110 - L.U. Simon Builders 1,246 82611 - Mirvac Group 1,194 62812 9 GJ Gardner Homes ** 1,176 1,34713 16 Devine Group 1,089 1,05714 12 Hickinbotham Group of Companies 1,058 1,19415 8 Dennis Family Homes 1,026 1,38716 17 Burbank Homes 1,015 1,03317 18 JG King Pty Ltd 979 1,03218 11 Clarendon Residential Group 935 1,20619 - Bloomer Constructions Pty Ltd 920 30320 15 Hotondo Homes ** 879 1,130

* Some dwellings built under franchise

** All dwellings built under franchise

LARGEST 20 Home Builders

Rank Starts


Company2010/11 2009/10 No. %

8 13 Brookfield Multiplex 846 110%5 10 Hickory Group Pty Ltd 729 57%

19 50 Bloomer Constructions Pty Ltd 617 204%11 31 Mirvac Group 566 90%10 27 L.U. Simon Builders 420 51%23 41 Philip Usher Constructions 339 75%43 101 Chase Building Group Pty Ltd 265 408%6 7 Porter Davis Homes 260 17%

31 36 Redink Homes Pty Ltd / 101 Residential Pty Ltd 92 17%81 - Adelaide Designer Homes 78 433%34 39 Carlisle Homes Pty Ltd 68 14%38 46 Rivergum Homes 62 18%55 72 Rawdon Hill Constructions 58 36%62 91 Normus Urban Projects 54 52%

Biggest Movers in 2010/11Builders who increased their starts by 50 or more

Rank Increase in starts in 2010/11


Company2010/11 2009/10 2010/11 2009/10

1 3 Metricon Homes 3,060 3,2142 2 Alcock/Brown-Neaves Group 2,529 3,4273 1 BGC (Australia) 2,181 3,8364 4 Simonds Group 2,161 2,1915 7 Porter Davis Homes 1,824 1,5646 5 Henley Properties 1,748 1,8817 6 JWH Group 1,318 1,6518 9 GJ Gardner Homes ** 1,176 -9 10 Hickinbotham Group of Companies 1,058 1,19410 8 Dennis Family Homes 1,026 1,38711 15 Burbank Homes 866 98212 20 JG King Pty Ltd 844 91113 - McDonald Jones Homes 817 85514 17 Scott Park Homes 811 98115 11 Hotondo Homes ** 788 -16 19 Content Living 776 92817 13 Masterton 762 1,02218 14 Clarendon Residential Group 705 99019 - Tamawood * 661 45720 - Redink Homes Pty Ltd / 101 Residential Pty Ltd 643 551



LARGEST 20 - Detached house builders

Rank Starts


28% 28% 28%

34% 35% 36%

41%37%

44%41% 41% 40%

38%40% 40%

36%

44%46%

42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Housing 100 Market Share - Houses Source: HIA Housing 100


Company2010/11 2009/10 2010/11 2009/10

1 1 Hickory Group Pty Ltd 2,003 1,2742 2 Brookfield Multiplex 1,618 3623 4 L.U. Simon Builders 1,246 8264 3 Meriton Apartments 741 1,1795 13 Bloomer Constructions Pty Ltd 720 2036 7 Philip Usher Constructions 708 3897 - Mirvac Group 633 08 - Devine Group 591 09 5 Pindan Pty Ltd 586 568

10 - Chase Building Group Pty Ltd 330 6511 6 BGC (Australia) 254 55612 11 Clarendon Residential Group 230 21613 - Australand 197 5014 12 Summit Homes Group 178 20615 14 Simonds Group 156 20116 - Burbank Homes 149 5117 17 Alcock/Brown-Neaves Group 139 9918 - McGrath Homes 136 019 16 JG King Pty Ltd 135 12120 15 Danmar Homes 132 131



LARGEST 20 - Multi-unit builders

Rank Starts


Rank Company2010/11 2010/11 2009/10

1 Simonds Group 2,228 2,3762 Metricon Homes 2,153 2,3353 Hickory Group Pty Ltd 1,980 1,2264 Porter Davis Homes 1,824 1,5645 Brookfield Multiplex 1,446 3176 L.U. Simon Builders 1,246 8267 Henley Properties 1,092 1,1178 Dennis Family Homes 1,016 1,3299 Burbank Homes 1,015 1,033

10 JG King Pty Ltd 967 1,02211 Carlisle Homes Pty Ltd 560 49212 Mirvac Group 396 3813 Hotondo Homes ** 364 43414 GJ Gardner Homes ** 357 35515 WSH Group Pty Ltd 345 34416 Orbit Homes Group 330 36417 Alcock/Brown-Neaves Group 257 11218 Hamlan Homes 245 35719 Glenvill * 242 29220 Snowdon Developments 221 165

Total 18,284 16,098Largest 20 market share comparison 31%* Some dwellings built under franchise


VICTORIA - 2010/11 STARTS = 59,116Starts


Rank Company2010/11 2010/11 2009/10

1 McDonald Jones Homes 817 8552 Masterton 757 1,0223 Meriton Apartments 741 4534 Clarendon Residential Group 684 8455 Mirvac Group 658 4306 Eden Brae Homes 599 6217 Allworth Homes 448 5378 Metricon Homes 415 2409 GJ Gardner Homes 414 385

10 Hotondo Homes 269 33011 Perry Homes (Aust) 216 23012 Coral Homes 213 24313 Lily Homes 171 20114 Integrity New Homes Pty Ltd 158 12215 ProCorp Builders 146 016 Firstyle Homes Pty Ltd 124 11817 Montgomery Homes Pty Ltd 110 10618 Eagle Homes 85 13619 Alkira Homes 81 5520 Allam Homes 76 113

Total 7,182 7,042Largest 20 market share 24%* Some dwellings built under franchise


NEW SOUTH WALES - 2010/11 STARTS = 30,135Starts


Rank Company2010/11 2010/11 2009/10

1 Bloomer Constructions Pty Ltd 920 3002 Philip Usher Constructions 791 4523 Tamawood * 643 6364 Devine Group 602 2625 Henley Properties 516 6646 Metricon Homes 486 6397 Hallmark Homes 376 5398 Coral Homes * 356 6879 GJ Gardner Homes ** 348 483

10 Tribeca Homes Pty Ltd 249 30211 Ausbuild 247 28912 Palmlake Works 226 18613 Alliance Homes 190 30814 Brookfield Multiplex 172 015 Hayman Homes 149 28416 Orbit Homes Group 142 23817 Mirvac Group 140 018 Hotondo Homes ** 116 19619 Parkside Constructions 105 11120 Rivergum Homes 103 28

6,877 6,604Largest 20 market share comparison 26%* Some dwellings built under franchise


QUEENSLAND - 2010/11 STARTS = 26,443Starts


Rank Company2010/11 2010/11 2009/10

1 BGC (Australia) 2,435 4,3922 Alcock/Brown-Neaves Group 2,411 3,4143 JWH Group 1,318 1,6514 Scott Park Homes 811 9815 Summit Homes Group 786 9956 Content Living 776 9287 Pindan Pty Ltd 688 7698 Gemmill Homes 686 7219 Redink Homes Pty Ltd / 101 Residential Pty Ltd 643 551

10 The Ross North Group 345 48311 Danmar Homes 230 18812 Aveling Homes 200 18013 Peter Stannard Homes 184 20714 Home Australia 169 20515 Highbury Homes (WA) Pty Ltd 152 15016 McGrath Homes 136 017 Australand 133 12818 Meliador WA Pty Ltd 59 7819 Colin Wilkinson Developments P/L 52 11420 GJ Gardner Homes ** 40 41



WESTERN AUSTRALIA - 2010/11 STARTS = 20,617Starts


Rank Company2010/11 2010/11 2009/10

1 Hickinbotham Group of Companies 1,058 1,1942 Devine Group 348 3953 Rivergum Homes 299 3124 Longridge Group 289 2915 Rossdale Homes 265 3936 McCracken Group 250 2537 Home Australia 231 2558 Normus Urban Projects 157 1039 Oakford Homes 154 204

10 Adelaide Designer Homes 96 1811 Eastern Building Group Pty Ltd 93 20012 Henley Properties 70 6713 Regent Homes (SA) PL 66 6514 Hotondo Homes ** 29 5115 Hickory Group Pty Ltd 23 4816 GJ Gardner Homes ** 16 57



SOUTH AUSTRALIA - 2010/11 STARTS = 10,732Starts

2011Construction Outlook

Breakfast

2011 construction outlook breakfast. victorian economic update - melbourne construction outlook...

Documents

measured slide

resilient source

parity source

victorian planning system

budget projections source

wage price index data

dwelling commencements

year growth