Key Trends Shaping Australia’s Construction Industry in 2025
According to industry experts at Altus Group, 2025 will be a year of transformation for Australia’s construction and development sector. Economic trends, government policies, and evolving societal needs will create both opportunities and challenges for developers, investors, and stakeholders.
Key Highlights
- Living sector growth: Demand is rising for Build-to-Rent (BTR), social housing, student accommodation, and aged care developments.
- Infrastructure slowdown: While some projects continue, a deceleration in infrastructure investment may impact overall sector activity.
- Labour shortages and economic shifts: Skilled labour remains in high demand, while geopolitical risks could affect material costs.
- Construction material prices easing: Cost escalation is expected to moderate by 2026, but long-term planning remains critical.
Expansion in Sector Activity
Despite a volatile market in recent years, activity levels are expected to increase across the construction sector in 2025. This presents significant opportunities, particularly in residential living developments.
Niall McSweeney, Head of Development Advisory at Altus Group (Asia-Pacific), predicts that demand for housing solutions will continue to rise, particularly in response to government incentives and private sector investment.
“In 2025, we expect to see the shoots of a lot of activity—especially around the living sector,” McSweeney said. “With government support, tax changes, and rising demand, this segment will have a significant impact.”
The Living Sector Leads Growth
Among the key focus areas, housing-related developments are projected to dominate the market:
- Build-to-Rent (BTR) projects are gaining momentum as investors seek long-term rental solutions.
- Social housing remains a priority, driven by affordability concerns and government funding.
- Student accommodation and aged care facilities are expanding to meet population demands.
“As Niall noted, ‘Anything living—anything that you put your head down on at night—will be the area where it all happens,’” reinforcing the sector’s strong outlook.
Looking Ahead
While challenges remain, particularly around labour availability and global economic uncertainties, strategic planning, sustainability initiatives, and technological advancements will help businesses navigate the evolving landscape.
