Australian communities reaching historic heights

Record high numbers of cranes in Australia

The final RLB Crane Index of 2022 shows a new record number of 868 cranes in Australia, a net increase of 55 cranes in the last six months. There is now one crane for every 30,000 people in Australia compared to five years ago when there was a total of 685 cranes, which equated to one crane for every 36,000 people.

As Australia’s largest capital city, Sydney has the most cranes at a count of 380 cranes. This equates to almost half (43%) of the nation’s cranes. In Sydney, there is one crane for every 14,000 people.

So, if you think there’s been a rise in the number of cranes and apartments in Sydney since you last visited, you are right!

Sydney is now halfway to a million apartments

Sydney leads Australia’s vertical community development with over 560,000 apartments. Sydney’s apartment market has almost reached a third of dwellings in Sydney at 31% in 2021, up from 28% in the 2016 Census. At 31%, Sydney has double the proportion of apartments compared to Melbourne’s 16% and Brisbane’s 15%.

Apartments on the rise, but consumer confidence is low

Of the 868 cranes in Australia, 535 are building residential apartments (61%). In a recent study commissioned by Construct NSW we found that less than one in three NSW residents (30%) had confidence to purchase an apartment due to factors such as affordability (58%), developer trustworthiness (24%) and the quality of buildings (24%).

Severe unaffordability an ongoing issue for Australia

Unaffordability of housing in Sydney will likely be the key driver towards sustained growth in the Sydney apartment market despite low confidence, as Sydney residents are faced with the fading dream of home ownership. Global standards from Demographia’s 2022 International Housing Affordability report demonstrate that any annual income to house price ratio greater than five indicates a severely unaffordable market. The 2022 results reveal an even worse situation for Sydney, which has a ratio of 15. This puts Sydney as the second worse market globally, ranking 91^st out of 92 major markets with only China: Hong Kong obtaining a ratio score of 23.

2022 Demographic unaffordability ratios for selected Australian cities

2022 Demographic unaffordability ratios for select nations

Global crane data shows Australia is in a construction boom

Australia has 868 cranes for a population of over 26 million people with one crane for every 30,000 people. Comparatively, New Zealand has 148 cranes for a population of over five million residents with one crane for every 34,000 people. China: Hong Kong has 182 cranes for a population of over seven million residents, which equates to one crane for every 38,000 people.

Future growth forecast in Australia as the epicentre of global population

Even after the global population milestone of eight billion people was reached recently, Australia’s relatively small population of 26 million people will continue to grow in the global population epicentre of the Asia-pacific region. Construction will continue to grow to accommodate Australia’s population growth which will benefit from net overseas migration as well as natural increase despite construction head winds including labour shortages, inflation impacts on materials and low apartment consumer confidence.

Australia is forecast to reach 29 million people by the end of the decade, and 40 million people by the middle of the century. Australia will need to house a further 14 million in almost six million dwellings in the next three decades, using the current average of 2.5 people per household. In Generation Alpha, Mark McCrindle’s latest book, a forecast of house prices in Sydney in 2040 reveals that homes will be worth $4 million. This is when Generation Alpha, currently aged 0-12 in 2022, will approach their home buying years in their 30s. And while wage growth may have slightly improved for parents of Generation Alpha today, the housing unaffordability crisis in Sydney and across Australia may only continue to get worse unless nation-building approaches to cities are adopted to increase supply and affordability.

Why count cranes and look at population growth and dwelling types?

Counting cranes today reveals the future homes our emerging generations are likely to rent and perhaps own. The purpose of using today’s crane data along with population forecasts and analysis of dwelling types in our capital cities is to anticipate the needs of future communities. What will future communities require to flourish with lower home ownership in rental apartment markets? As Australia’s housing unaffordability continues to worsen there are forward-thinking architects, town planners, government, policy makers, community leaders, principals and even parents who will benefit from developing strategies today. How do today’s leaders help emerging generations to flourish socially, financially, physically and emotionally as cities continue to evolve? The latest data helps leaders make the best strategic decisions.