Construction costs are soaring, so where can you still build a house?
- The median house price in Sydney has surged 115% in the last 8-years.
- The price of timber is up 380%, steel is 44% higher & the cost of bricks have tripled.
- Pandemic induced labour & materials shortages, supply chain issues and bushfires drive the hike in materials costs.
Despite the cost of building a house blowing out by 51% over the past eight years, Sydney remains the best Australian capital city to still make money from building a house.
The 115% increase in the median house price between 2013 and 2021, outpaced the 51% increase in construction costs per square metre over the same period.
The worst performing capitals have been Perth and Brisbane. Residential housing construction costs in Perth have risen 26% over the past eight years, compared to a mere 17% increase in the median house price over the same period.
However, all capital cities are currently experiencing blowouts in construction costs and timelines due to global shortages of materials.
Timber prices have skyrocketed 380% over the past 2-years, while steel has surged 44% and brick prices have also increased.
The global pandemic led to labour shortages and supply chain issues. Bushfires have impacted timber supplies and shipping costs are at a record high, impacted by the flow-on effect from the Suez Canal blockage earlier this year.
With international borders remaining shut, material costs continuing to increase and supply shortages disrupting supply chains, it appears no matter the amount of government stimulus available, builders will continue to face a roadblock in ability to meet demand and budgets for the foreseeable future.
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