Construction costs in Queensland are expected to surge over coming years as the state’s Olympic build ramps up, new forecasts suggest.

International project advisory firm WT Partnership has released the November edition of its Australian Construction Market Conditions Report.

The report provides a breakdown of escalation forecasts and drivers across 13 markets and major sectors.

According to the report, the near-term outlook is relatively benign.

In 2026, WT expects the Australia-wide level of cost escalation to come in at 5.2 percent for building construction and 5.0 percent for infrastructure construction.

This represents the lowest level of building cost escalation for six years and is within the four to six percent range that was normal prior to COVID.

By 2028, however, annual cost escalation is expected to reach 6.4 percent for buildings and 5.8 percent for infrastructure.

Pressures will be particularly severe in Southeast Queensland.

Across Brisbane, the Gold Coast and the Sunshine Coast, WT expects cost escalation in 2028 to reach 10.0 percent, 9.5 percent and 9.0 percent for building construction and 8.0 percent, 6.8 percent and 8.5 percent for infrastructure construction.

The latest forecasts come as Queensland is expecting a ramp up in construction activity in preparation for the 2032 Olympics.

Earlier this year, the Queensland Government finalised plans for a $7.1 billion program of stadium construction to take place over seven years.

The plan includes eight new venues and twelve existing venue upgrades.

There will also be upgrades to roads, railways and local sporting facilities (not included in the $7.1 billion).

In its report, WT says that there is an enormous volume of work to be completed before 2032.

This is not just Olympic villages but also a large spend in hotels, health, transport and utilities as well as an increased volume of housing work.

The effect may spread beyond Brisbane.

In Sydney and Melbourne, for instance, WT expects building costs to increase by between 4.75 percent to 5.0 percent each year over the next three years.

In addition to recovering local activity, cost pressures in these cities will be affected as resources and labour shift north.

WT’s construction economist Damon Roast said the data highlights the return of capacity constraints.

He says the effect will be felt nationwide.

“Queensland’s infrastructure and building boom will have national consequences,” Roast said.

“As Olympics-related and housing projects ramp up, we expect competition for labour, materials and capability to intensify – particularly in 2027 and 2028. The sector has little buffer to absorb another wave of simultaneous demand.”

While infrastructure escalation is expected to remain slightly lower than building, WT notes that the next cost cycle in infrastructure will be driven less by roads and rail, and more by renewables, transmission, and water infrastructure.

This will create new regional pressure points particularly in regional markets.

Indirect costs such as financing, insurance and compliance also continue to exert upward pressure, Roast said.

To address the challenges, Roast says that ongoing investment in skills and sector capacity is needed.

Without this, the next construction upswing could quickly strain delivery systems.

Despite the challenges, WT sees early signs of stabilization in the Australian economy.

Furthermore, it stresses that there are opportunities for better cost control through data-led digital solutions such as BIM.

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