Homes in Australia are getting much more expensive to build, with the average cost of erecting a private dwelling soaring by nearly $80,000 (about US$54,000) in the past 12 months.
Among the states and territories, New South Wales had the highest average building cost of $457,166 per dwelling, followed by the Northern Territory at $451,364, Victoria at $439,480, and Queensland at $410,126.
At the same time, Victoria and Queensland experienced the most significant growth in average building cost at around 27 percent, while South Australia’s cost only increased by 8.5 percent during the period.
Rising building material costs, high inflation, supply chain disruptions and wage pressures have forced builders to hike their prices.
Paul Viney, the Victorian president of the Association of Consulting Architects, said home builders pushed their prices up a lot to avoid losses.
Soaring Building Material Costs
Housing Industry Association senior economist Nicholas Ward told The Epoch Times that the cost of building materials rose by about 15 percent in the year to March 2022 and 18 percent during the whole COVID-19 period.“COVID has seen demand for building materials increase around the world, including in Australia,” he said.
“In Australia, the number of homes under construction is actually at a record level, but COVID has also seen the supply environment very, very constrained.
“So the combination of very strong demand and very constrained supply … The net result of that is cost increases.”
Matthew Mackey, Arcadis’ Executive Director of Cost and Commercial Management, said although the supply chain pressures plaguing the sector in 2021 were easing, other factors now weighed more heavily on the outlook for construction costs in the country.
“With immigration still limited, the supply of labour remains tight. And that will feed into costs.”
Mackey also warned that skills and labour shortages would become a critical issue for the Australian construction sector in the next decade.