The current state of the Queensland construction industry is proving to be a mixed bag for investors, according to a new report.
With lacklustre demand and low consumer confidence, recovery is being hindered across the state, according to the Master Builders’ Survey of Industry Confidence for June 2012.
“One of the key reasons that demand remains so soft is that consumers are still very much in a risk averse mindset with concerns about job security, living expenses and debt levels continuing to dominate,” the report into Queensland stated.
Looking at nine broad areas of the state, confidence over the past 12 months was found to have dropped across the board.
Also hampering a residential recovery in construction included stagnant house prices, problems with financing and valuations, and the global economy.
As 2011 to 2012 was ‘one of the toughest years’ that many builders had experienced in the industry, investors may see less supply coming onto the market.
House prices are also expected to dip further, signaling that Queensland is nearing the bottom of the cycle.
“In a positive development, the outlook for housing affordability is expected to improve slightly over the next 12 months thanks to the softening of house prices in some areas of the state,” it stated.