Australians across the country endured a 7.3% rise in housing construction costs in 2021 and recorded the highest growth rate since March 2005.
Despite some cost relief for Christmas, experts say that cost savings in the fourth quarter of last year may not last long as the country continues to suffer from supply chain disruptions in 2022. I’m afraid of that.
Similar to the above evaluation, the index of the Housing Industry Association released on February 4 (pdf) Showed that the construction performance shrank by 11 points in December 2021 and January 2022, reversing the recovery from November last year.
Peter Burn, Chief Policy Advisor of the Australian Industrial Group, an employers’ organization covering a wide range of industries, attributed the recession to a combination of economic factors.
“This recent recession was caused by the disruption of labor supply, material supply, business and household confidence associated with the rapid expansion of Omicron stocks,” he said.
on the other hand, Cordell construction cost index Real estate database company CoreLogic has shown that housing construction costs have skyrocketed 3.8% nationwide in the three months to September last year.
Since then, construction cost growth has fallen to 1.1% in the fourth quarter of 2021, and quarterly trends have fallen to the same level as the five-year average, below the consumer price index of 1.3% for the same period.
Tim Mallless, CoreLogic’s research director, said the low increase in the previous quarter may indicate some rebalancing, but housing construction costs will average rates over the next three months. I predicted that it would exceed.
“There is a fair amount of housing construction work in the pipeline that has been approved but not yet completed,” Laures said.
“Some housing projects may be delayed or over budget due to reported shortages of some materials such as wood and metal products.”
With home prices rising 22.4% across Australia in the 12 months to January 2022, experts expect it to be expensive to complete new homes and home remodeling.
In other words, high construction costs are likely to exacerbate the affordable challenges that already exist in the market.
Matthew Walker, an insurance expert at CoreLogic, warned that existing homeowners and investors could bear the brunt of rising construction costs.
“In these eras of rapidly rising housing and construction costs, insurance can quickly become a real threat to what is the most valuable asset,” he said. ..
“It’s important for homeowners to track insurance amounts and make sure that using the insurance company’s rebuilding calculator or making a phone call is sufficient in the worst case.”
Construction costs in New South Wales increased 1% in the December quarter from 3.8% in the last three months, with annual growth of 7%, according to a Cordell report.
Victoria witnessed the highest rise in the fourth quarter of the five major states, from 3.5% in the third quarter to 1.2%. The state’s annual construction cost growth rate is 7.1%.
Queensland costs increased 1.1% in the fourth quarter from 4.3% in the third quarter, with annual growth of 7.3%.
Both Western Australia and South Australia recorded a 1.1% increase in the fourth quarter, boosting annual growth to 7.9%.
The above data measures the rate of change in construction costs for self-contained and semi-detached single-family and two-story homes.