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Building and construction market in Australia

The Australian building and construction sector is highly fragmented. There are three broad sub-sectors:

  • residential
  • non-residential and
  • engineering construction.

These sectors are cyclical, although their activity cycles differ.

In the construction sector more than 90 percent of businesses employ fewer than five people.

The most common house structure in Australia (more than 50 percent of all new houses) is brick veneer with a tiled roof built on a concrete slab. Average house sizes continue to increase.

Influences on non-residential and engineering construction include economic growth, infrastructure and commodity demands and speculation.

Dwelling construction influences include consumer confidence, interest rates, affordability, government policy and taxes, prevailing property values, demand, demographics, age distribution and numbers of births, deaths, marriages and divorces.

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Getting your product into market

The Australian industry relies heavily on relationships, making a market presence an important consideration. Companies that can should establish a full-time presence in the market.

Australians take a short-term project-to-project approach. Underlying supply chains and business systems are immature, though increasing globalisation is forcing a change towards more strategic, long-term and total service packages.

Products will need to be competitive on a global rather than local scale to be successful.

The main means of distribution are:

  • importers
  • state or national distribution companies which may also act as agents or representatives
  • buying groups
  • building and hardware wholesalers and retailers and
  • the internet.

While a growing number of hardware, retail chains and major construction companies are importing products direct using e-commerce, increasingly retailers are pushing the responsibility of warehousing and distribution back onto the supplier.

Pricing is very competitive although quality, on-time delivery and service also rate highly.

Regulations

The Building Code of Australia is the overarching legislation governing building and construction products. Each state and territory has accompanying legislation linked to the code.

Local governments can apply further regulations.

New Zealand goods can enter Australia duty free provided they meet criteria under the Rules of Origin (ROO) test. This determines whether goods have been made in either Australia or New Zealand.

Australia has a mandatory minimum 5-star home energy rating standard that is incorporated in to the building code. This applies to all new homes and homes undergoing major renovation.

Opportunities

  • Close proximity and efficient freight services provide New Zealand exporters with advantages in delivery and service.

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