Last year it looked like the rapid rise in construction costs had come to an end. Now it looks very different.
According to real estate giant, Ray White, the cost of building a new home increased by more than 20 per cent in the 12 months to September 2022
By September 2023, that rate of growth had declined to 3.9 per cent.
Not slowing, at all
Given how expensive it is to now build a new home in Australia and the negative impact this has had on housing supply, it was hoped there would at some point soon be a decline in construction costs. Concerningly, the rate of growth has again climbed.
What’s behind the growth?
Labour continues to be a major contributor to the cost of construction and year-on-year increases in wages remain problematic to bring down the cost of building a new home.
The Australian Bureau of Statistics specifically pointed to a lack of finishing trades. Strong union activity, now the subject of a Senate inquiry, has also contributed to low productivity in the industry.
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