Cbd's Cranes Taking Flight
Sydney Morning Herald
Saturday September 11, 1999
IN THE past few months the Sydney skyline has undergone a significant change as the number of cranes dotting the tops of buildings have gradually disappeared.
Since the peak of the construction boom in April last year, there were 34 cranes across the Sydney CBD. That number is now 22 and property experts forecast there will be only about 10 by the end of this year.
By the time of the Olympic Games in September 2000, the number of cranes in the CBD is predicted to have dwindled to about four or five.
The crane count is not seen as an accurate measure of total building activity, rather it reflects the number of large construction projects under way at any given time.
But if city workers thought the skyline was one big construction site, in the early 1990s at the height of the property boom there were 34 cranes in the CBD - most of them on sites that eventually became black holes.
The reason for the current decline is that the projects that have dogged city workers for the past few years are now being completed. However it does not mean construction in the CBD has come to a complete stop, as the next round of new skyscrapers is due to start construction by about 2004.
Mr Peter Studley, senior analyst property markets for Westpac Property Services, said the reduced number of new office projects was a healthy sign of the market self-correcting and would provide time for the existing supply to be absorbed.
"We believe office demand will surprise on the upside this year," Mr Studley said.
Among the main projects yet to be completed are the new office tower at Angel Place being built by AMP, the Citibank Centre on the corner of George and Park streets, Lend Lease's new Aurora Place, formerly the State Office Block, at 88 Phillips Street, and the 363 George Street site.
There are a few cranes lingering at the World Square site at the southern end of George Street and one of the older holes in the ground, the former George Patterson site at the northern end of George Street, which Justin Hemmes is turning into a hotel, night club and bar complex.
IT IS no secret the cost of building a home in Sydney is not a cheap proposition, but at the moment the charges for labour and material are at historically high prices.
The impetus for the rises have been well documented - the hailstorm, the pending introduction of a goods and services tax and Olympics-related construction work.
The heightened demand has led to a rise in the cost of a bricklayer from about $650 per 1,000 bricks to $1,000 per 1000. Even the price of the humble brick has inched ahead from about 40 cents for the run-of-the-mill house brick to about 50 cents or even 60 cents, depending on the type of clay required.
Although some of the costs will decline, industry experts believe they will settle at about 10 per cent above the "average" price - from June 1998 - this time next year.
The shortage of qualified labour has also added to the higher costs.
Mr Brendan Crotty, managing director of Australand, a leading home builder, said the prices for materials and services had risen dramatically across the whole industry.
"The convergence of a number of events such as the hailstorm and the Olympics next year have compounded the cost of labour and materials to an historic high," Mr Crotty said. "Although I see the charges coming down, they will remain about 20 per cent higher than the average by the end of 1999 and about 10 per cent higher in June next year.
"Since the hailstorm, prices have gone up for everything from bricks, to a lesser extent, bricklayers by about 40 per cent, tilers, floor and wall ceramics, painters and builders. It's across the board."
Mr Crotty said he expected some prices to decline in the next few months.
A spokesman for the Master Builders' Association confirmed that, in general terms, the shortage of labour and materials had led to an explosion in prices, which could get worse in the short term.
Mr Mike Bartlett, from Cordell Building Information Services, said there was
evidence of higher prices creeping into the market.
SYDNEY UNDER CONSTRUCTION
CRANES ON BUILDING SITES, JULY 1999
Jamiison St. 1
Aurora Place 88 Philip St. 2
Angel Place 123 Pitt St. 2
Macquarie St. (Mirvac) 1
Park Plaza 2 Park St. 3
Goulbourn St. 1
Wales House 66 Pitt St. 1
Kent St. North 1
385 Kent St. 1
Dixon St. 1
581 George St. 2
State Rail 4-6 Lee St. 1
Ultimo Maryanne St. 1
George Patterson Building 1
Conservatorium of Music 1
© 1999 Sydney Morning Herald