The ACT will have a soft landing as the rest of Australia stares down the barrel of a massive residential building sector slump, territory industry experts say.
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Earlier this week market analyst BIS Oxford Economics released a gloomy report on the country's construction sector, forecasting the sharpest market contraction since the 2008 global financial crisis.
"The building sector is switching from being a strong growth driver to a drag on the economy," BIS Oxford economist Adrian Hart said.
"Over the next two years, the fall in residential building starts will accelerate sharply, particularly in the investor-driven apartments segment, which is set to fall 50 per cent."
The BIS Oxford report forecast the number of new buildings being started in the territory could fall by 27 per cent between 2017/18 and 2018/19.
"The key driver of the residential building downturn is falling investor demand," Mr Hart said.
"Domestic and foreign investor demand is weakening in the face of tougher lending criteria and increased foreign buyer charges."
Housing Industry Association ACT director Greg Weller said the territory's apartment boom might tail off a little bit, but that was only part of the story.
"I think we are talking about a little bit of a tail off," he said.
"But the important story is that this is driven by multi-unit buildings. Detached home buildings will actually increase we predict.
"I don't think it's something that will have dire economic consequences."
The territory's apartment downturn would likely see the numbers of units being built fall slightly after record growth in recent years, Mr Weller said.
"We see no reason to think it’s going to be a hard landing for units – maybe it will tail off and go back to a more steady growth," he said.
Economic indicators such as the ACT's strong population growth also meant that the apartment sector was far from dead, Mr Weller added.
"Write off the apartment market at your peril," he said.
"Strong population growth helps as well, so that when an investor steps out of the market, there are other people willing to step in."
Master Builders ACT chief executive Michael Hopkins offered a similarly upbeat assessment, singling out positive signs for the non-residential construction sector as well.
"The ACT building and construction industry is currently experiencing a very positive phase, with the residential, commercial and civil sectors all performing well," he said.
"Residential building approvals in the ACT have been above the decade average for the last three years driven mostly by an increase in apartment construction."
Predictions of a sharp downturn in the ACT also failed to take into account several important territory-specific factors, Mr Hopkins said.
"Predictions of a sharp downturn in ACT construction industry fail to take into account the Territory's above-average population growth, investment in light rail, increasing private sector land release and government initiated urban infill.
"Indications of a strong construction sector are reinforced by job figures which reveal that in the past year alone the industry created more than 100,000 new skilled jobs, accounting for more than one in every four new jobs created."
