As people move away from buying and toward renting, demand for industry services will continue to grow.
New York, NY (PRWEB) March 09, 2014
The Apartment and Condominium Construction industry has experienced one of the fastest recoveries among residential construction industries. “Decreased vacancy rates and lower rent prices have facilitated growth in multifamily complex starts,” according to IBISWorld Indsutry Analyst Omar Khedr. In addition, declining homeownership rates, aggressive lending into the multifamily sector and improved employment and disposable income have all boosted demand for apartments and condominiums. Despite a steep drop in 2009, industry revenue is expected to grow at an average annual rate of 9.2% in the five years to 2014.
Starting in 2010, the industry has experienced a sharp increase in demand for multifamily homes, emerging as one of the fastest-growing real estate segments in the five years to 2014. “Demand for industry services has been largely supported by many potential homeowners who have opted to rent apartments rather than buy homes,” says Khedr. This trend has been reinforced by limited access to credit and a cautionary mindset among individuals during the slow economic recovery. In addition, an increasing number of young professionals has led to lower vacancy rates in major metropolitan areas, stimulating demand for new projects during the five-year period. As a result, IBISWorld expects revenue to jump 3.1% to $50.0 billion in 2014.
In the five years to 2019, the current growth trend is expected to slow down. Industry revenue is anticipated to increase at an average annual rate of 3.5% to $59.4 billion during this period. Although revenue will grow at a slower rate due to a surplus of projects in key markets, continued migration of the US population toward metropolitan areas will still generate strong demand for industry services.
For more information, visit IBISWorld’s Apartment and Condominium Construction in the US industry report page.
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IBISWorld industry Report Key Topics
The Apartment and Condominium Construction industry is composed of general contractors responsible for constructing new multifamily residential units, including high-rise apartments, townhouses, condominiums and medium-to-high density units (i.e. units not separated by a ground-to-roof wall). All of the complexes may be constructed for sale as condominiums or cooperatives, or used as rental apartments. This industry does not include speculative builders or contractors who build on their own account for sale.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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