2018 CCF Victorian Infrastructure Outlook Report 1 | Page 24

2018 Victoria Infrastructure Report
decline over these years. A weakening undersupply of
dwellings has felt the weight of new supply in the market,
with Victoria expected to develop an oversupply in
2017/18. With population growth holding strong over the
forecast period against declines in new oncoming stock,
dwelling completions will fall below underlying demand in
2019/20 and an undersupply of dwellings will re-emerge
in 2020/21. By 2020/21, commencements will improve
slightly from its low base thanks to growth in detached
houses returning.
Non-Residential Building
Victoria has recorded a strong result for 2016/17 with non-
residential building commencements forecast expanding
by 32 per cent. With a series of major office projects
scheduled to commence, a further gain is forecast for
2017/18 – a new record. The Melbourne economy is
running extremely strongly, helping spur inward migration
and business investment. However, weaker results are
forecast for 2018/19 and 2019/20 in response to slowing
economic conditions, although activity will still hold
at what is an elevated level historically and a modest
improvement should flow thereafter.
Figure 2.2: Victorian Population Growth (Thousands of Persons & Per Cent)
Source: BIS Oxford Economics, ABS data
State of Play and Outlook for
Infrastructure and Mining
Construction
Victoria’s engineering construction profile is more
evenly distributed across several sectors, unlike those
of resource rich states such as Queensland and Western
Australia. Sectors contributing to state activity include
roads (the largest sector in the past five years and
will continue to be the largest in the next five years);
telecommunications (third largest contributor in the past
five years, but set to rise to the second largest following
investment related to the NBN); electricity sector; and
railways (where the level crossing program is set to almost
double engineering activity over the medium term).
Mining and Heavy Industry sector however, is expected to
decline.
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