Office sector contracts sharply as data centres and mixed-use fill construction pipeline

Australia's construction sector recorded 845 cranes across major cities in Q3 2025, maintaining activity above the long-term average of 775 cranes for the eighth consecutive edition. While the national count edged up marginally from 840 in Q1 2025, the latest Rider Levett Bucknall (RLB) Crane Index reveals significant regional divergence, with three markets achieving record highs amid broader sectoral shifts.

Adelaide emerged as a standout performer, reaching its highest crane count since tracking began. The RLB Crane Index for Adelaide now stands at 433 points, with 26 cranes operating across the city. Health infrastructure is driving growth with five cranes across hospital redevelopments and expansions. The commercial sector contributes another five cranes, while residential development maintains momentum with 12 cranes across inner-city and coastal precincts.

The Gold Coast continues its construction surge, recording 67 cranes and an index level of 447 points, both records for the region. Crane numbers have increased 110 per cent over the past three years, driven almost entirely by residential and mixed-use development responding to strong population growth. The scale of activity reflects both build-to-sell apartment projects and emerging build-to-rent developments, with institutional capital increasingly targeting the Gold Coast for large-scale rental housing.

Wollongong and Shellharbour achieved their strongest result since joining the index in 2019, rising to 111 points with 20 cranes operating across the region. Health infrastructure expansion and mixed-use developments continue to reshape the Wollongong CBD, with the latter now representing 35 per cent of regional crane activity.

Sectoral shifts reshape national pipeline

Data centres emerged as a significant growth driver, increasing from 29 to 32 cranes nationally. Melbourne's west leads this expansion, reflecting the strategic importance of digital infrastructure. These large-format industrial developments typically feature extended construction timeframes and substantial institutional capital investment.

Mixed-use developments recorded the strongest proportional growth, rising from 103 to 108 cranes and now accounting for 12.8 per cent of all crane activity. This trend reflects both planning requirements for higher-density precincts and developers' risk mitigation strategies through asset class diversification. Sydney leads mixed-use activity with 80 cranes, concentrated in Parramatta, Macquarie Park and inner-city renewal precincts.

The hotel sector showed renewed confidence, growing from nine to 14 cranes nationally, a 55.6 per cent increase reflecting recovery in tourism and hospitality investment. Health infrastructure maintained steady activity with 28 cranes nationally, up from 23 in Q1 2025, with major hospital expansions underway in Brisbane, Adelaide and Perth.

In contrast, the commercial office sector experienced a sharp decline, falling from 60 to 48 cranes nationally, this 20 per cent reduction reflecting elevated CBD vacancy rates and subdued tenant demand. Office projects now represent just 5.7 per cent of national crane activity. Civic and institutional projects also fell from 34 to 28 cranes as government building programmes reached completion.

Major markets show divergent trajectories

Sydney remains Australia's most active construction market with 370 cranes, accounting for 43.8 per cent of national activity. Residential development accounts for 210 cranes (56.8 per cent), while mixed-use projects represent 80 cranes (21.6 per cent). Activity continues shifting toward outer suburbs, with Sydney's north reaching a record 118 cranes, 31.9 per cent of the city's total.