Expected lift in construction activity pre-empted by insurance data

New insurance policy data from the Queensland Building and Construction Commission has seen a 27% uptick in two years in premium policies written.

Noting that the insurance policies are a precursor of building activities due to requirements in the Act that requires insurance premiums to be paid when entering into residential construction works contracts, Minister for Housing and Public Works, Tim Mander, expects to see construction grow.

“5,544 insurance premium policies were written in January 2014, compared to 4,946 in January 2013 and 4,349 in January 2012,” Mander said.

“That’s a 12%  increase on 2013 and a 27% increase over 2012, and shows dwelling construction is heading in the right direction.”

Homeowners are covered by the premium under the Queensland Home Warranty Scheme for up to six and a half years. This could be incorrect or incomplete work and subsidence issues.

Mander said the increase is lining up with ABS data, showing a trend dwelling approval increase of 2.6% in January.

However, it isn't just construction on dwellings that shows up in the premiums, with home warranty insurance required for all builders or contractors who undertake work over the value of $3,300 for a homeowner in certain categories, making it less certain that the increase will be as pronounced as the "construction boom" suggested by Mander's release.

Premiums may include work on building a new home, related roof building, townhouse or multiple unit dwelling (no more than three storeys), but it also relates to adding to, altering, renovating or repairing a dwelling, replacing or refitting of fixtures or fittings in a kitchen or bathroom or work on an unenclosed elevated platform, deck or veranda.

Painting, swimming pools, driveways, paths or roads are not included as residential construction work. You can see a full list here of what is included.

jduke@propertyobserver.com.au

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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