Australia Construction Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2025-2034)

Australia Construction Market Overview

Rapid urbanisation, especially in cities like Melbourne, Perth, Brisbane, and Sydney, is surging the necessity for apartments and commercial spaces to accommodate the burgeoning population. Governments and private developers are also focusing on developing more affordable residential developments in urban areas to cater to diverse income groups. In September 2024, Housing Australia selected an initial pipeline of 185 projects to deliver over 13,700 social and affordable homes across the country.

The introduction of government initiatives aimed at boosting infrastructure is propelling the Australia construction market expansion. In May 2024, the Australian government announced its decision to invest over AUD 1 billion for the 8,500-ARTC rail network. Besides, the increasing concerns regarding housing shortages in the country are prompting both federal and state governments to develop affordable housing plans. In October 2024, the Australian government launched a low-cost housing plan to build nearly 1.2 million homes by 2030 to ease the housing shortage in the country.

Australia Construction Market Growth

The increasing prevalence of natural disasters in Australia, such as floods, bushfires, and cyclones, among others, is surging the need for the development of disaster-resistant infrastructure, such as fire-resistant buildings, flood barriers, and storm-resistant structures. This is prompting construction companies to use non-combustible materials, steel framing, fire-rated cladding, fire-resistant windows, and advanced sprinkler systems. Moreover, there is a growing integration of advanced technologies such as smart sensors and early warning systems in infrastructure and buildings to provide real-time information regarding environmental conditions and enable rapid response in the event of a disaster.

Rising investments in renewable energy infrastructure, such as solar projects, wind energy, and battery storage systems, to reduce the dependency on fossil fuels, are creating lucrative Australia construction market opportunities. In October 2024, X-ELIO announced the expansion of its Blue Grass Solar Farm, located in Queensland’s Western Downs, with the addition of a 148 MW Battery Energy Storage System. The project contributes to the Queensland Government’s plan to generate 70% of its energy needs from renewable sources by 2032 and 80% by 2035.

Key Trends and Developments

Australia Construction Market Trends

Modular and prefabricated construction methods are becoming increasingly popular in Australia due to their ability to reduce construction time, costs, and material waste. These methods also help minimise on-site errors and delays. As sustainability becomes a key focus in the industry, there is a rising demand for these construction methods to reduce the carbon footprint of projects. Advanced technologies like 3D printing and Building Information Modeling (BIM) are enhancing the efficiency and precision of modular construction. The demand for affordable housing is further driving the popularity of prefabricated homes, with the New South Wales government piloting modular social homes in 2024. Sustainability is a growing priority in the Australia construction market. In 2024, the Green Building Council of Australia updated its Green Star Performance tool to meet evolving standards. The sector, contributing 18% of national emissions, is moving toward net-zero targets by 2050, with increased use of energy-efficient systems, sustainable materials like recycled steel, and low-carbon technologies. Advanced technologies are transforming the construction sector, with tools like BIM, robotics, and 3D printing improving project efficiency, safety, and precision. The use of AI and machine learning for predictive analysis and site safety is also expected to drive further growth in the market, particularly in addressing the housing shortage.

Opportunities in the Australia Construction Market

Increasing Development of Smart City Projects

The increasing development of smart cities requiring advanced transportation infrastructure, including autonomous vehicle lanes, intelligent traffic management systems, and smart roads with sensors for real-time data collection is aiding the Australia construction market expansion. Construction companies are focusing on developing smart grids, data centres, and communication infrastructure to support the rising need for digital connectivity in smart cities. With cities needing enhanced communication infrastructure, particularly fibre-optical cables and 5G networks, the construction of telecommunications infrastructure, such as telecommunication towers, data centres, and underground fibre-optic networks is increasing.

Expansion of Healthcare Infrastructure

There is a rising construction of medical research centres, hospitals, and medical office buildings amid the evolving healthcare needs and advancements in medical technology in Australia. Construction firms specialising in healthcare technology integration are increasingly developing smart hospitals equipped with automated systems, IoT-enabled devices, and data-driven patient care. Moreover, the ageing population of Australia is driving the demand for aged care facilities such as assisted living communities and nursing homes. As of June 30th, 2020, there were nearly 4.2 million older Australians (aged 65 or over), with the geriatric population comprising 16% of the overall Australian population.

Australia Construction Market Restraints

One of the major factors impeding the growth of the construction industry in Australia is the looming shortage of skilled workforce, including project managers, tradespeople, and engineers in the country, leading to construction delays. Factors like supply chain disruptions, growing transportation costs, and shortages of essential materials like steel, timber, and cement can also hinder the market. 

The Australia construction industry is heavily dependent on imported building materials, exposing it to trade restrictions and currency fluctuations. Evolving regulations regarding building standards, safety, and zoning by state, federal, and local governments can increase the complexity of construction projects.

Australia Construction Industry Segmentation

Australia Construction Market Share

By Construction Type Insights

Renovation accounts for a considerable portion of the Australia construction market share. With homeowners staying in their properties for a longer duration due to high costs associated with purchasing new houses, limited property choices, and housing affordability challenges, investments in renovating and upgrading areas such as bathrooms and kitchens are increasing. In May 2023, Australians spent around USD 1,044 million on renovation activities, a surge of 4.3% from the previous month. While kitchens accounted for 23% of renovations, living room, bedroom, and bathroom makeovers represented 20% each of renovation activities. 

The Australian government is also focusing on upgrading infrastructure and public buildings to promote the economic development of the country, further fuelling the segment’s growth. In October 2023, Brisbane Airport commenced Future BNE, a UAS$ 5 billion renovation project that is aimed at upgrading international and domestic terminals, transforming aircraft parking, and constructing advanced aeromedical facilities to provide optimal facilities to the increasing number of travellers.

Meanwhile, new construction in Australia is increasing amid growing housing shortages, rising population levels, and the introduction of favourable government initiatives aimed at boosting infrastructural development. In the year to the end of March 2024, construction of 171,667 new homes were completed in Australia.

By End Use Insights

As per the Australia construction market analysis, commercial construction activities are significantly increasing in the country due to the growing labour sector, rising investments in office development, and favourable interest rates. The surging construction of hotels, shopping centres, and entertainment facilities amid the robust growth of the tourism sector also favours the commercial construction market development in the country. In August 2024, the construction of Crystalbrook Sam, a new AUD 130 million 13-storey, five-star hotel luxury hotel in Adelaide, commenced.

Besides, residential construction activities in the country are buoyed by the growing immigrant population, especially in urban areas. The rising investments in residential construction by the Australian government amid the looming housing crisis are further aiding the segment’s growth. Meanwhile, the outlook of institutional construction is expected to be favourable in the coming years, supported by the growing spending on sectors like healthcare and education, among others.

Institutional construction, including educational institutions, healthcare facilities, and public buildings, in Australia is increasing due to factors like rapid urbanisation, rising population levels, growing geriatric individuals, and the introduction of government policies promoting ageing-in-place and age-friendly environments. Conversely, the rising industrial construction activities in Australia can be attributed to the robust growth of the e-commerce sector, increasing supply chain activities, and the surging construction of manufacturing plants for different sectors, such as automotive, mining equipment, and food processing. 

Competitive Landscape

Key players in the Australia construction market are attempting to reduce carbon emissions and integrating sustainable practices such as rainwater harvesting and solar power to meet stringent environmental standards. Australia construction companies are also adopting technologies such as drones, robotics, automation, and building information modelling (BIM) to improve construction efficiency and lower labour costs.

Laing O’Rourke Corp. Ltd.

Laing O’Rourke Corp. Ltd. is a renowned construction and engineering company that is headquartered in Dartford, England. The company delivers advanced building and infrastructure projects for its customers in the Middle East, the United Kingdom, and Australia. It aims to become a pioneer and innovator in the construction sector by 2025.

J Hutchinson Pty Ltd.

J Hutchinson Pty Ltd., founded in 1912, has established its position as a diverse and dynamic construction com...

Lendlease Corporation Limited

Lendlease Corporation Limited is a global real estate company that has been involved in delivering iconic proj...

*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*

Other Australia construction market players include Brookfield Corporation (Multiplex Constructions Pty Limited), CIMIC Group Ltd. (CPB Contractors), John Holland Group Pty Ltd., ADCO Constructions Pty Ltd., Fulton Hogan Ltd., Mirvac Limited, and Hansen Yuncken Pty Ltd., among others.