March 08, 2018
WELLESLEY, Mass., March. 08, 2018– Urbanization, low interest rates, government funding for housing projects and the increasing popularity of high-rise buildings are combining to boost the residential housing construction market, according to a report by BCC Research.
The market for residential building construction reached $4.2 trillion in 2017 and is expected to grow at a compound annual growth rate (CAGR) of 10.1% through 2022, when it will be valued at $6.8 trillion, according to the report Residential Building Construction Industry: Global Markets to 2022.
Major players in the market include China State Construction Engineering, Country Garden Holdings, DR Horton, Lennar Corporation, Pulte Group, CalAtlantic Homes, Daiwa House, NVR, Toll Brothers and KB Homes. These major corporations, however, account for a combined 4.2% of the market.
“Globally, governments are providing funds and subsidies to make housing affordable, especially for low income families,” said Gordon Nameni, BCC Research senior editor. “These subsidies allow customers to borrow money at low interest rates for the purchase of a house or for the construction of a new house. An example of this comes from the Australian government, which provides funding of $15,000 through the First Home Owners Grant scheme for the purchase or construction of homes by first time buyers.”
Market Challenges Include Uncertain Conditions, Lowered Productivity
Globally, residential construction companies reported being uncertain about the industry’s future growth due to market uncertainty. Construction companies were less focused on expanding into new markets and instead focused on strengthening their product portfolios. Meanwhile, productivity in the industry has been declining for the past two decades due to the industry becoming less capital intensive and the presence of a large number of smaller firms which tend to use outdated processes and technologies. Productivity in the industry has grown at just 1% annually for the past 20 years, and profit margins are decreasing. In the United States, builders’ productivity have dropped by half since the late 1960s and in the past 20 years, both Germany and Japan have seen negligible growth in construction productivity. Productivity has also declined significantly in both France and Italy in the same period.
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Residential Building Construction Industry: Global Markets to 2022( MFG045A )
Publish Date: Feb 2018
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