Developers say the record amount of crane activity is likely to be short-lived, as strong demand for work on state-backed infrastructure projects takes resources away from apartment building.
The number of cranes in operation reached a record high of 882, a 5.5 per cent increase, over the past six months, according to quantity surveying firm RLB’s crane index.
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The record number of cranes on the skyline is the result of an uptick in activity on civil infrastructure projects in Sydney, Melbourne and Brisbane. Growing government demand led to a 900 basis-point increase in that sector’s share of construction activity. It now accounts for 6.3 per cent of cranes.
Residential cranes still account for the majority of the nation’s crane activity. There were 24 more of them in action nationally, although the residential crane proportion of total crane activity decreased by 600 basis points to 62.8 per cent.
The infrastructure push was clearest in Melbourne, where there was a net increase of six civil cranes. Significant activity in Melbourne includes the Westgate Tunnel project, the level crossing removal project and the Metro Tunnel project.
But the growth in civil cranes crowded out other types of projects in Melbourne and led to fewer cranes in the city. Melbourne’s total crane numbers fell by seven to 178. Residential activity was 20 per cent lower compared to pre-COVID-19. In the past six months, Melbourne had seven fewer residential cranes and seven fewer mixed use cranes.
“There isn’t a lot of capacity unless there’s more forward thinking in terms of how you resource projects,” RLD’s Domenic Schiafone said.
“The drop in crane numbers could be due to a number of factors including the shift in sector activity from high-rise commercial and residential construction to civil construction.”
In Sydney, residential crane activity remained strong. Its overall crane numbers increased by nearly 10 per cent to break the 400 mark for the first time, hitting 401 cranes across the city.
The increase in crane activity was due to a net increase of 27 cranes for residential and mixed-use projects. More than half of those cranes were for housing in Sydney’s west. There was also a net increase of three civil cranes in Sydney.
Residential activity also remained strong in Brisbane, the Gold Coast and the Sunshine Coast. All three regions recorded higher residential cranes compared to the start of 2023. The regions recorded residential crane net increases of three, three and six.
But veteran Queensland developer Don O’Rorke said residential crane activity was expected to slow, as infrastructure projects such as the Cross River Rail drew capacity away from residential projects and as construction costs rose.
Brisbane’s Cross River Rail is one of the projects that will take construction resources away from high-rise apartments.
“The high level of government building projects in hospitals and schools is putting pressure on capacity building system to deliver. Then there’s the Olympics, which the markets are very conscious will need more resources and will significantly impact the whole industry,” he said.
Rising labour and material costs meant only high-rise residential projects that could be sold at $15,000 a square metre were financially viable. At that price, a two-bedroom apartment would need to be sold at between $1.2 million and $1.4 million, Mr O’Rorke said.
“That’s clearly only achievable in super premium locations that are in the inner ring of Brisbane. What that means is fewer apartments are going to be started in south-east Queensland over the next couple of years.”
Queensland’s annual apartment completion numbers have started to decline to around 2500, from an average of about 5000, according to Colliers.
Crane numbers would follow suit, Mr O’Rorke said.
While the veteran developer said the construction industry’s capacity constraints would hurt residential building, those infrastructure projects announced by the Queensland government were essential to cater to population growth.
To address the upcoming shortage of capacity to build apartments, governments needed to increase the supply of land, target immigration to bring in skilled workers to address large gaps in the labour force, and change the education system to encourage more people to work in construction, Mr O’Rorke said.
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