Increasing population density in capital cities is driving demand for townhouse and apartment developments.
Melbourne, Australia (PRWEB) April 29, 2014
The Land Development and Subdivision industry has been highly volatile since the late 2000s as the global financial crisis and government stimulus spending led to wide fluctuations of investment into the key building markets, which resulted in shifts in demand for developed land. Investor confidence was severely shaken by the economic downturn, with businesses and households tightening spending. The Federal Government attempted to stimulate the local economy by injecting funds into primary school refurbishments and encouraging new housing investment through the First Home Owner Grant. IBISWorld industry analyst Anthony Kelly states, “The withdrawal of the government stimulus packages contributed to further contractions in building investment during 2010-11 and drove industry revenue to a deep cyclical trough.” The industry has maintained strong cyclical growth since 2010-11, with revenue projected to climb by 6.6% during 2013-14 to reach $11.8 billion. Despite the recent strong growth, the industry is estimated to generate moderate revenue growth by an annualised 1.7% over the five years through 2013-14, with employment climbing by an annualised 1.1% to total 21,700 people in 12,600 establishments over the period. The leading players in the industry are the state government land corporations, which plan and develop public land for sale to home owners and residential property developers.
According to Kelly, “The future of the industry is looking positive given the ongoing population growth and the push to develop residential subdivisions and associated services in the outer suburban growth corridors of major cities.” The continuing urbanisation of Australia is raising population density levels in major cities, creating stronger demand to replace lower density housing with high-density townhouses and apartment blocks.
The Land Development and Subdivision industry has a low level of market share concentration. The top players in the industry are nearly all government land organisations. The largest private developer is Peet Limited. However, the industry predominantly comprises small-scale business, often family trusts. The majority of enterprises have no paid employees (87%), being sole proprietors and partners. Two-thirds of enterprises generate annual revenue of below $200,000. By contrast, there are only about 100 businesses employing more than 20 people (1% of enterprises), with 8.4% of enterprises generating revenue of $2.0 million or more. For more information, visit IBISWorld’s Land Development and Subdivision report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry is primarily engaged in subdividing and amalgamating land into lots and preparing and servicing land for subsequent sale, including excavation work for the installation of roads and utility lines.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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