Manchester's building boom falters to 'lowest level in 10 years' as huge developments fall through

The great Manchester building boom slowed to its lowest level in a decade, the latest Deloitte crane survey has shown – but analysts are optimistic there's more development to come. The city saw the start of only 20 new construction projects in 2024, which the survey said was the 'lowest level in 10 years'.

Despite the successive decline in new starts over three years, John Cooper, infrastructure and real estate partner at Deloitte, holds an optimistic view regarding Manchester's prospects. He said: "You only need to look at the skyline in Manchester to see just how much the city has changed over the last decade, as it has transformed it into a dynamic innovation hub. Our survey's findings demonstrate that despite ongoing pressures and a decrease in new starts, Manchester's construction sector remains active."

In the combined area of Manchester and Salford, there were 58 developments under construction over the past year. That led to an 'significant increase' in completed projects, with 27 reaching completion. Residential initiatives were central to the construction sector, with 4,448 new homes finished in the previous year, while another 10,788 homes were still being built.

With residential projects constituting over half of the new schemes and approximately 9,000 additional homes predicted to be ready within two years, market analysts suggest that "Manchester is on track to exceed the average annual demand for homes", reports the Manchester Evening News.

Mr Cooper, said: “Despite economic headwinds and political uncertainty shaping much of 2024, the residential market in Manchester continues to deliver strong results.

“The city’s commitment to addressing housing needs and the projected completions of approximately 9,000 new homes over the next two years means Manchester is on track to exceed the average annual demand for homes, identified in Greater Manchester policy.”

“With Manchester’s leading higher education institutions also bringing in thousands of students every year, the city’s student residential sector is continuing to deliver more bedspaces, with a number of new permissions granted to ensure growing student demands can be met.”

Office openings in Manchester have seen a significant increase, with 1.07 million sq ft marking the largest total since 2020. However, concerns persist about the lack of new office space available in the city centre in the coming years

Mr Cooper added: “The shift to hybrid working patterns has created an opportunity to deliver high-quality office space that prioritises collaboration and sustainability. Manchester has certainly embraced this trend whilst seeing a shift towards refurbished offices which represents 68% of the total floorspace under construction in 2024. The pipeline of activity is strong, ensuring Manchester remains at the forefront of hybrid, sustainable office spaces that cater to changing working dynamics.”

Professor Duncan Ivison, Vice-Chancellor of the University of Manchester, emphasised 'there is more to do' in 'attracting top talent to the city-region and empower them to push the boundaries of discovery and innovation'.

In the hospitality sector, 258 new hotel rooms were completed last year, with an additional 1,181 expected by 2028.

This expansion will support the growing demand for visits to Manchester, which has been boosted by the opening of Aviva Studios in 2023 and Co-op Live in 2024. Deloitte now estimates Greater Manchester's tourist economy to be worth £8.7b, a figure also bolstered by fans attending Manchester City and United matches.

Last week BusinessLive reported on Manchester's big ambitions to become a £15bn tourist city.

“Manchester boasts many unique cultural offerings, from its iconic music scene to its globally renowned football teams. New leisure developments are making the city a must visit destination, bringing world-class artists right to our doorstep.

“The tourism sector was hit hard during the pandemic, however it’s clear that it has come out the other side stronger and more resilient, with Manchester alone accounting for £4.65 billion of tourism and supporting around 45,000 jobs. As a result, the demand for hotel rooms is growing further, with a strong development pipeline helping to ease strains on the sector.”