Analysing the relationship between new housing supply and residential construction costs with the regional heterogeneities

New housing supply in Australia has been experiencing a low rate of increase in conjunction with a dramatic increase in residential construction costs since the 1990s. This study aims to estimate the relationship between new housing supply and residential construction costs with the regional heterogeneities. Based on a panel error correction model, it can be identified that there is a causal link as well as a significant correlation between new housing supply and construction costs in the Australian sub-national housing construction markets. The model developed in this research assists policy makers to better understand the nature of the supply side of the housing sector and then enact appropriate policies to improve the new housing supply in Australia.

New housing supply and residential construction costs in Australia : a panel ECM approach

The supply of new housing in Australia has been experiencing a low increase rate since the 1990s in conjunction with an increasingly strong housing demand. On the contrary, residential construction costs across Australia?s states maintained dramatic increases simultaneously. Economic theory suggests that new housing supply is correlated to the costs of residential constructions. However, few empirical studies have focused on examining this relationship for Australian housing markets. To comprehensively investigate the relationship between the supply of new housing and residential construction costs a function for new housing supply considering the effects of regional heterogeneities is introduced in this study. By estimating a panel error correction model (ECM) applicable for quantifying the correlation with regional heterogeneities, this research identifies that a causal link and a strong correlation exist in between new housing supply and residential construction costs in Australia.

Height and construction costs of residential buildings in Hong Kong and Shanghai

A widely recognised theme of construction economics suggests that the cost of construction per square metre increases as building height rises. However, after many years, research conducted regarding the height and cost issue have established a classic relationship between those two, well known as a U-shaped curve. This paper describes the study of height-cost relationship of high-rise residential buildings in Shanghai and Hong Kong. Initial findings indicated that the curved relationships of height-cost of residential buildings in Shanghai and Hong Kong exhibit different profiles. The differences suggest that, Hong Kong contractors have more expertise in multi-storey and high-rise construction than contractors in Shanghai. The dissimilarities also imply that different sets of criteria should be applied in the judgement of height affects cost in different locations. Many factors could be contributors, such as the history and experience in constructing residential high-rise buildings, location, linkage and relationships to the neighbourhood provinces, design and construction regulations, and government policy on residential construction.

Height and construction costs of residential high-rise buildings in Shanghai

A widely recognized theme of construction economics suggests that the cost of construction per square meter increases as building height rises. However, over a number of years, research conducted regarding the height and cost issue has established a classic relationship between the two factors which can be represented by a U-shaped curve. This paper describes the study of the height-cost relationship of high-rise residential buildings in Shanghai in terms of the total construction cost and elemental costs while considering the context and commonality of buildings. This research was developed as an extension of the previous work, which examined data for buildings in Hong Kong. Initial findings indicate that the curves illustrating the relationships between height and cost of residential buildings in Shanghai and Hong Kong exhibit different profiles. The dissimilarities indicate that different sets of criteria should be applied in the judgment of height that affects cost in different locations. In terms of elemental costs, the findings suggest that there are differences in the way these costs react to changes in the building height.

Using the Big Mac index for comparing construction costs internationally

This paper explores the use of purchasing power parity (PPP) in the comparison of construction costs between different countries, and whether the development of construction-specific indices will improve reliability.

The approach adopted is to compare the construction cost of a typical five star international hotel per square metre in each of ten major cities using a range of PPP methods and to comment on their variability. In particular, this paper looks at whether an index based on the price of a McDonalds Big Mac3 hamburger is a viable alternative when compared against the mainstream methods. The recent publication of construction-specific indices as part of the Eurostat-OECD joint PPP program is also compared against generic indices and the discrepancy is calculated.

The paper concludes with reflections about which approach is preferable when attempting to assess global construction relativities and what further research is needed.

Auditing construction costs during building design : a case study of cost planning in action

Building cost planning was originally developed in the framework of traditional procurement methods with conventional documentation, tendering and administration processes. With the advent of alternative forms of procurement with more fluid approaches to design stages and documentation, the need for sound cost planning does not appear to diminish. As a process established on solid theoretical foundations, cost planning should be robust enough to adapt and flourish in a variety of procurement environments. However, little documentation and analysis of transformed and adapted forms of cost planning appear to have been made. This case study of a design-construct company in Melbourne, Australia, presents and explores a contemporary form of building cost planning integrated into a design cost management approach adopted by a construction company experienced in alternative forms of procurement. The article traces this process on a design-construct project from inception to the end of the design development stage and tender. Whilst the fundamental framework of cost planning remains intact, the focus and detail in each of the stages are guided by the company's priority for greater financial control over the cost and value implications of design and other decisions. This recently established working model of design cost management in this company has been designed to deliver added value to the client through a better balance of time, cost and quality in each project.

Ventilation research on Australian residential construction

This paper applies established testing methods used to discover the ventilation performance of various residential building envelope construction in Australia. Under the definition of 'ventilation performance' we imply the building envelope leakage (or infiltration) the living space air change rates, the volumetric flow rates and the pathways of air flow between subfloor, room volume and roof spaces. All of the methods applied and discussed here are on-site, evidencebased performance of actual structures as tested by the Mobile Architecture & Built Environment Laboratory and Air Barrier Technologies.

Use of renewable building materials in residential construction : a review

The development of mass-produced environmentally-benign housing is one of the critical factors in the transition to global sustainability. Such housing will need to be constructed from renewable and/or recycled materials, be conditioned using minimal or no non—renewable energy, and be affordable. The universal need for such built environment resource stewardship is urgent. In developing countries, the requirement is to shelter growing populations, and in industrialised countries, there is a need for an alternative to the current resource and nergy-intensive material usage in housing. While there are some good surveys of building materials made from renewable resources, such as the BEDP Environment Design Guide Pro 11 by Gelder (2002), there does not appear to be a comprehensive database of these materials linked to abundant and reliable supply. This paper reviews the current availability and potential usage of renewable materials applicable to Australian mainstream residential construction. It concludes that the current state of publicly available information is dispersed and embedded in multiple sources with variance in detail, incomplete access and uncertain comparison across the sources.

Ventilation research on Australian residential construction

This paper applies established and new testing methods to discover the ventilation performance of various residential building envelope constructions in Australia. Under the definition of 'ventilation performance' we imply the building envelope leakage (or infiltration) of the living space air change rates, the volumetric flow rates and the pathways of air flow between subfloor, living and roof spaces. All of the methods applied and discussed here are on-site, evidence-based performance of actual structures as tested by the Mobile Architecture and Built Environment Laboratory and Air Barrier Technologies. The testing processes primarily involve the Tracer Gas Decay Method (TGDM) and rhe fan pressurisation method (FPM a.k.a 'blower door'). All the measurements are performed with respect to the external wind speed and direction as well as the typical weather parameters. This paper discusses the differences and similarities of both testing methods as well as several other testing procedures that can inform the researcher on air leakage pathways. Findings of a simultaneous TGDM and FPM air leakage rate comparison are also encountered in this paper. One of the most informative testing methods, is the application of three different tracer gasses introduced into different spaces (subfloor, living and roof) to discover pathways of air flow within residential construction.

Increasing the level of sustainability via off-site production : a study of the residential construction sector in China

Even though the use of off-site production in the construction process for residential buildings is seen as a viable means of increasing the level of sustainability with respects to its significant economic, environmental and social contributions, there have been very few studies to-date into off-site construction within the context of developing countries where the places have crucial demands for accommodations. Accordingly this research involves the rapidly growing developing nation, China, as a representative developing country with the objective to investigate the current status of off-site practices in the urban residential construction sector. This paper also examines the factors affecting demand for and potential barriers against a wider uptake of off-site technologies in China. The findings provide a rare insight into off-site construction in China’s housing industry and this information will be transferable to other developing countries. This study also contributes to a broader understanding about the off-site construction in developing from an international perspective.

The Australian construction linkages in the 1990s

Abstract: During the 1990s, the construction sector played an important role with its growing contributions to the gross national product, gross domestic product and employment in the Australian economy. Using the newly released 1998-99 input-output table and four previously published tables by the Australian Bureau of Statistics, this paper aims to measure the sectoral linkages of the Australian construction sector in the 1990s in relation to other industrial countries. Results describe the increase in construction volume was mainly due to the increase in governmental and non-residential construction expenditures and lagging construction technology. The technical level of the non-residential construction sub-sector was a drag to the total construction, while the non-residential construction sub-sector presented a stronger economic push than that of the residential construction sub-sector. In the 1990s, the inputs and outputs' components of the construction sector were stable. The linkages of the Australian construction sector are discussed from an international point of view.

International comparisons of construction industry performance: further investigations

While there have been many attempts at comparisons of construction performance over the past 50 years, the results have generally been inconclusive and/or contradictory.

Such comparisons are of great interest to industry, governments and theorists alike but there is little agreement as to how they are best done. A variety of methodologies have been used, however, the lack of satisfactory outcomes has been due largely to one factor, the lack of a truly reliable method for comparing construction costs in different currencies

Exchange rates are recognised as being unsuitable, and while purchasing power parity (PPP) has a long history, the method still has many critics. In addition, the nature of the building industry and its products makes the establishment of reliable construction PPPs very difficult. Both the UN’s International Comparison Program (ICP) and the European Union gather data for the production of construction-specific PPP indices, but neither body publishes them, as there is too much doubt about their reliability.

New approaches are being developed and some are soon to be trialled. This paper looks at the problems, describes and discusses some new approaches, and assesses their potential.

A comprehensive framework for assessing the life cycle energy of building construction assemblies

Environmental decision making during the building design process has typically focused on improvements to operational efficiencies. Improvements to thermal performance and efficiency of appliances and systems within buildings both aim to reduce resource consumption and environmental impacts associated with the operation of buildings. Significant reductions in building energy and water consumption are possible; however often the impacts occurring across the other stages of a building‘s life are not considered or are seen as insignificant in comparison.

Previous research shows that embodied impacts (raw material extraction, processing, manufacture, transportation and construction) can be as significant as those related to building operation. There is, however, limited consistent and comprehensive information available for building designers to make informed decisions in this area. Often the information that is available is from disparate sources, which makes comparison of alternative solutions unreliable and risky. lt is also important that decisions are made from a life cycle perspective, ensuring that strategies to reduce environmental impacts from one life cycle stage do not come at the expense of an increase in overall life cycle impacts

A consistent and comprehensive framework for assessing and specifying building assemblies for enhanced environmental outcomes does not currently exist. This paper presents the initial findings of a project that aims to establish a database of the life cycle energy requirements of a broad range of construction assemblies, based on a comprehensive assessment framework. Life cycle energy requirements have been calculated for eight standard residential construction assemblies integrating an innovative embodied energy assessment technique with thermal performance simulation modelling and ranked according to their performance.