A national survey of construction industry tender price movements across the country shows that the northern Queensland cities of Townsville and Cairns are being held back by a lack of funding for development activity.

International property and construction consultants Davis Langdon have just completed their quarterly Tender Price Index survey which shows that given the magnitude of the global economic fallout, the Australian economy displayed relative resilience throughout 2009.

National research director Rachel Kelloway said that there are signs that nationally the construction industry has experienced the worst and is on the way back up.

However, in both Cairns and Townsville commercial construction activity remains subdued as unfavourable credit terms discourage speculative development.

In Cairns recent commercial developments are partially let and commercial floors in Government offices have received limited interest.

Ms Kelloway said competitive pricing continues with reduced trade prices, preliminaries and overheads leading to lower tender pricing. “Concrete, steel and glazing prices have also fallen,” she said.

“Tender prices fell 1.7% across 2009 and are expected to remain relatively unchanged during 2010.

In Townsville recently completed mixed use developments have high vacancies and there have been no new commercial approvals.

“The Townsville market is enduring strong levels of competition, however margins remain fairly high because of the lack of skilled trades in the city,” said Ms Kelloway.

“As contractors complete their current workload, the outlook for 2010 looks weak.

“Trade costs are actually expected to drop early next year with tender pricing expected to remain flat in the first quarter and fall by about 1% from the current levels as the year progresses.”

Davis Langdon employs ten professional staff in Townsville and Cairns and is involved in some of the region’s largest projects including Altitude Residential Apartments, Coles Sugarworld Shopping Centre and the Innisfail Learning Facility

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