24/05/2023
Australian construction costs have finally shown signs of easing.
Experts attribute this in part to a slowdown in demand for construction services due to the pandemic, as many homeowners delayed or cancelled building projects. This reduced demand has led to a decreased strain on the supply chain, which is reflected in lower prices for building materials and other construction inputs.
Another factor contributing to the easing of construction costs is increased competition among suppliers as more construction companies and builders returned to the market. This has put downward pressure on prices, particularly in markets where there is a surplus of building materials and services.
Despite these positive developments, the construction industry is still facing challenges, particularly with regard to labour shortages. Many workers left the industry during the pandemic, either because of health concerns or because of uncertainty surrounding the economy. This has led to a shortage of skilled workers, particularly in trades such as carpentry, plumbing, and electrical work.
Overall, while there are reasons to be optimistic about the easing of construction costs, the industry will undoubtedly face ongoing challenges as it works to rebound from the effects of the pandemic. It will be important for builders, suppliers, and policymakers to work together to address these challenges and ensure that the industry remains strong and resilient in the years ahead.
Although the growth in construction costs is easing, the annual rate of change remains 2.8 times higher than the pre-COVID five-year average of 3.6%.
Queensland had the highest quarterly and annual growth changes of 1.2% and 11.6% respectively. South Australia and Western Australia both recorded quarterly growth rates of 0.9% and annual increases of 8.8%.
