Increasing Construction Costs: When Will Australians Find Some Relief?

Increasing Construction Costs: When Will Australians Find Some Relief?

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Construction costs in Australia have risen over the past few years. In 2022 alone, the cost of many building materials has spiked up to forty percent, adding pressure to the already stressed construction industry.

It’s been predicted that the industry will experience some respite in 2023. But prices have remained stubbornly high, and increasing construction costs is still something prospective property owners and builders can expect in the near future.

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Residential Project Cost Per Major City

Sydney has always been at the top of the list of the most expensive cities to build a house in. Property owners and builders can expect to spend upwards of $1,300 per square metre for residential projects.

You can also expect increasing construction costs in major cities such as Adelaide, Perth, and Melbourne. On the other hand, builders in Brisbane, Gold Coast, and Sunshine Coast can breathe a sigh of relief as the overall cost of building a dwelling in these areas is lower compared to other major Australian cities.

Keep in mind that these figures are for single homes only. Building costs go up significantly for high-rise apartments and townhouses.

Office Building Project Costs

As expected, Sydney still tops the list when it comes to the cost of constructing an office building. The cost of building a 20-storey structure per square metre here starts at more than $4,000.

This is followed by the city of Melbourne and then by South East Queensland. Office buildings per square metre start at nearly $4,000 in Perth. It is followed by Adelaide at a little more than $3,000 per square metre.

Hotel Building Project Cost

Building and fitting out a five-star hotel is a different beast altogether when it comes to costs. This type of construction is the most expensive in South East Queensland and Sydney.

Good news for builders in Adelaide, Melbourne, and Perth as prices are significantly lower compared to the first two areas.

Industrial Building Project Cost

Increasing construction costs is not the only thing hounding builders specialising in industrial projects. Land values have also skyrocketed in the past few years, and finding available and suitable sites for this type of project has become increasingly harder.

Melbourne and Adelaide take the cake regarding the lowest construction cost for building an industrial property. Perth sits right in the middle, followed by cities in South East Queensland. Unsurprisingly, Sydney still takes the top spot when it comes to high building costs for industrial properties.

Retail Construction Cost

Adelaide and Melbourne are considered bright spots when it comes to low construction costs for retail properties. Perth comes in third, while South East Queensland is the second most expensive place to build a retail store in the country. Sydney is still the frontrunner when it comes to high prices in retail construction.

While we’ve left supply chain woes caused by the pandemic far behind, the Australian construction market is still plagued by high fuel and material prices, as well as ongoing labour shortages. These, in turn, have led to soaring prices for new construction. As a result, many developers have held off on many projects, including residential ones.

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