Major Construction outstrips the state but housing slows
By Damon Cronshaw and Donna Page. Newcastle Herald, 16th May 2006
Major construction projects worth $3.4 billion have been planned and approved in the Lower Hunter in the past 16 months as non-residential building booms in the region.
The Hunter Valley Research Foundation (HVRF) confirmed yesterday that non-residential building approvals in the Hunter jumped 77 per cent in the March quarter when compared with the same time last year.
HVRF economist Andrew Searles told The Herald activity in the Hunter far outstripped the state.
In NSW non-residential building approvals fell 17.7 per cent for the same period.
“The residential building market is very weak and approvals are continuing to contract,” Mr Searles said.
“But the non-residential market is strong and doing much better than the state.”
The HVRF will make an announcement about the construction approvals with an analysis of the strength of local business as its economic update on Friday.
Leading Australian construction analyst Reed Construction Data, provided The Herald with an analysis of the Lower Hunter showing in the past 16 months more than $3.4 billion worth of major building work (valued at $5 million and more) was underway or planned.
Lake Macquarie led the way with $1.6 billion worth of work, almost double any other local government area in the region.
Newcastle had $883 million worth of work and Port Stephens $716 million.
Cessnock projects totalled $116 million and Maitland $114 million.
Newcastle Master Builders Association executive director Len Blakeney confirmed that non-residential building in the Hunter was doing better than ever.
Mr Blakeney said this was the result of general growth and businesses shifting to the region.
“In terms of construction the region is doing very well and the forecast is good for the time ahead,” he said.
“I do not think anyone could have imagined the amount of business parks that are being built and filled in the region.
“Then you look at the Mater Hospital and Charlestown Square and Kotara shopping centre, we are talking about major work.”
Developer Hilton Grugeon agreed saying the commercial and industrial sectors in the Hunter were “very strong”.
Civil engineering firm Daracon said the booming coal mining industry was providing ample work.
“The industry is quite busy at the moment for civil engineering,” Daracon property development divisional manager Phil McLeod said.
“The exception is the property development sector, which is still quite slow compared to one or two years ago.”
Abigroup Contractors central region general manager Bill Sullivan said the rejuvenation of Newcastle had led to more people moving to the region and a greater demand for services.
Mr Sullivan said this had provided significant construction work in the Hunter.
The John Holland Group’s Newcastle manager Stephen King warned the recent interest rate rise could have a noticeable effect on the industry.
“Most larger projects are financed with loans. Rising interest rates will certainly add to costs and may preclude some projects from going ahead,” he said.
Lake streets ahead as projects multiply
By Damon Cronshaw
Lake Macquarie is leading the Lower Hunter for construction projects worth more than $5 million.
Reed Construction Data shows that projects worth $1.6 billion had been planned and approved in Lake Macquarie since January 2005.
Projects include the $31 million upgrade of Belmont Hospital, the recently completed Alto Apartments in Charlestown and the $300 million proposed revamp of Charlestown Square.
Newcastle registered $883 million in construction work, almost half the value recorded in its neighbour’s area.
Lake Macquarie City Council development assessment and compliance manager Peter Hodge said the release of the council’s local environment plan in 2004 was a major factor.
“It took a long time to come to fruition. Before it came in, there was a moratorium on rezonings that held back a lot of development,” Mr Hodge said.
“The local environment plan released a lot of land opportunities, particularly in our higher interest areas like the commercial centres of Charlestown, Belmont, Swansea and Morisset.
“Developers saw the opportunities and started investment strategies and a lot of applications flowed to the council in that higher end of the market.”
The council introduced measures it says have improved its ability to process development applications.
Lake councillors, halfway into their four-year terms, have been strongly pushing development.