GENERAL NEWS
WITH the quarterly pace of growth for national construction costs picking up again, growth rates look to be a return to trend and not a new surge.
According to CoreLogic and the Cordell Construction Cost Index (CCCI), construction cost growth was up at a rate of 0.8% in the three months to December...
In the previous four quarters the quarterly CCCI rate fell from 4.7% in Q3 2022 to 0.5%in Q3 2023, with the 2023 calendar year recording a growth rate of 2.9%...
“This suggests that reacceleration is more a return to trend rather than a new surge in construction costs,” said Kaytlin Ezzy, economist at CoreLogic...
The latest 12-month increase, at 2.9%, reflects the smallest annual rise in the CCCI since the year to March 2007, when it was 2.7% and is well below the pre-COVID...
“This suggests that growth in construction costs have normalised after recording a recent peak of 11.9% over the 12 months to December 2022, albeit at a higher level,”...
“Although 26.6% higher than at the onset of the pandemic, the recent surge in CCCI is below the increases seen across national house values, with CoreLogic’s Home Value...
In Victoria, the CCCI was up 1.1% over the quarter, up from 0.3% in the September quarter. While the annual increase eased to 2.9%...
Queensland saw its slightest quarterly rise at just 0.1%, down from 0.8% in the previous quarter. With an annual growth rate of 2.8%...
Construction costs in WA were up 0.7% over the quarter, an increase of 50 basis points on quarter three. With an annual rate of 2.3%...
While in South Australia, the CCCI was up 0.5%, down from 0.6% in Q3, for an annual increase of 2.8%...
“In 2023 there was a bit of uncertainty around what the fallout from the interest rate increases would be and therefore the overall impact on the building industry...
“While dwelling approvals are still well below historic averages, there is still an elevated level of projects under construction which is keeping cost pressures high.”...
“Although national dwelling approvals have risen from a recent low of 12,185 in January, the latest data from the ABS showed that dwelling approvals remained -15.8% below...
“However, with the CPI continuing to ease, it’s looking increasingly like we’ll see a cash rate cut in the second half of 2024, which could fuel housing demand for both...