Western Australia has recorded the second highest annual increase in construction costs in the nation, up 10.4 per cent over the 12 months to June 2022.
It was only a touch behind South Australia which had the highest annual increase in construction costs, up 10.5 per cent.
It is the fastest pace of growth on record for residential construction costs outside the introduction of the GST in 2001, according to CoreLogic’s Cordell Construction Cost Index.
The construction sector is facing tough times with predictions conditions won’t settle for a year. Credit:Jason South
CoreLogic construction cost estimation manager John Bennett said the figures showed the cost of metal, structural steel, reinforcing, fixings and fencing were under pressure, adding to rising prices across timber products.
“Suppliers are frequently mentioning the impact of rising fuel, freight and electricity costs on their bottom line and these are significant additional challenges being faced by the industry,” he said.
“It is important to note these factors only add to other pressures that have impacted the residential construction industry for 18 months now, such as labour availability and overheads.
“A shortage of labour and materials means a delay in completion times, which leaves builders vulnerable to market changes and holding costs.”
CoreLogic research director Tim Lawless said the double-digit annual increase in construction costs had been expected, with the impact playing out across several states this year.
“Construction cost growth is an additional concern to an industry already under immense workload pressures as well as economic conditions such as rising interest rates and inflationary pressures,” he said.
