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Construction Costs Rise Across Australia

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Housing construction costs rose over the first quarter of 2020, with a steady 1 per cent increase, according to Cordell.

This was slightly up from to the last quarter at 0.9 per cent with analysts anticipating the impact Covid-19 was yet to be felt.

Despite a negative outlook on the industry from many analysts, construction in Australia continues to go ahead and house prices have remained steady with states expected to ease restrictions in the coming months, providing Covid-19 rates remain low.

“Covid-19 will likely have some influence on the movement in the CHIP index due to factors such as the availability of labour, and price of materials,” Corelogic said.

“At this stage it is a little too early to see what impact it will have, but it is more likely to be a deflationary movement, as a surplus of labour becomes available while the commencement of new projects slows.”

Related : House Prices Keep on Ticking Despite Crisis

StateQuarterly GrowthAnnual GrowthCapital City House Price Growth Q1 2020
NSW0.9%3.6%3.9%
VIC1.0%3.8%2.9%
QLD1.1%4.0%1.6%
SA1.0%2.8%0.6%
WA1.0%2.9%0.9%
Combined1.0%3.6%1.98%

Source: Corelogic

This sentiment was reflected by developers reluctant to push ahead with new projects and analysts predicting construction activity to decline.

According to the report while dwelling approvals and employment in construction increased at the start of the year it could change.

“The ABS have noted on both the building approvals and labour force datasets that they are currently monitoring for potential impacts from the coronavirus so again this will be something to watch.”

Corelogic uses the Cordell housing index price index to measure costs within the residential market for freestanding, semi-detached single and two-storey homes including carpentry, joinery, excavation, concrete work, preliminary, roofing, plumbing, brickwork, painting, plastering, electrical, glazing and hardware.

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Article originally posted at: https://theurbandeveloper.com/articles/construction-costs-rise-across-australia