As the Australian construction industry lifts itself off the floor after the global financial crisis, international property and construction consultants Davis Langdon are predicting increases in tender prices through 2010.

Davis Langdon’s latest quarterly Tender Price Index report, which measures the movement in tender prices across the country, shows a decline of 1.9 percent during 2009 and forecasts an increase nationally of 1.5 percent in 2010.

Davis Langdon’s national research manager, Rachel Kelloway, said the Federal Government’s stimulus packages buffered the nation for the worst of the GFC fallout and most sectors of the construction market have remained resilient.

She said the Sydney and regional New South Wales construction sector was being hampered by the tight financial conditions.

However, Davis Langdon’s Sydney Director Alan Jenkins is predicting that the ‘major project’ market may pick up quite quickly in 2010.

Mr Jenkins said currently there was a ‘two speed’ tendering market in NSW. “Major commercial projects remain hamstrung by the hangover of the GFC, plus the lack of available funding and low tenant demand,” he said.

“I believe if you went to the market right now with say a $100 million commercial development you would still get very competitive tenders from the tier one builders and sub contractors.

“On the other hand as the Building Education Revolution and residential housing stimulus works come on line, especially in regional areas, contractors and sub contractors alike are near capacity and as such the market forces are driving prices up.”

Ms Kelloway said much of the increase in demand will be evident in the second half of 2010.


For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au