The rate of cost growth across Australia’s housing construction industry has reaccelerated and has now returned to normal levels following a period of subdued cost growth, new data shows.

Real-estate services firm CoreLogic has released the September quarter edition of its Cordelll Construction Cost Index report.

The index monitors the movement in costs which are associated with construction of a typical Australian standard home involving three bedrooms and two bathrooms.

It measures costs in terms of materials, labour, plant/equipment and preliminary costs (land is not included).

According to the report, the quarterly rate of price and cost escalation reaccelerated from a previously subdued level of 0.5 percent in the June quarter to 1.0 percent in the September quarter.

This represents a relatively normal level of housing construction cost growth compared with that seen prior to COVID.

Over the longer term, the index has risen by 3.2 percent over the past year and is up by 29.5 percent since COVID.

CoreLogic Construction Cost Estimation Manager John Bennett said building costs had stabilised, with minimum increases and decreases being recorded for the quarter.

He said that relatively modest increases in costs have been seen areas such as masonry, cement sheeting, joinery, plumbing materials (mainly copper) and general waste disposal.

“This quarter has shown no standout specific trends in the market for construction cost materials,” Bennett said.

“We fully expect this to continue for the coming months.”

CoreLogic Economist Kaytlin Ezzy said the data would likely put additional pressure on the Federal Government’s target of delivering 1.2 million new homes over the five years from 1 July 2024 under the National Housing Accord.

To achieve that goal, around 240,000 homes would need to be constructed each year.

Over the year to June, however, only 176,000 new dwellings were completed.

“With the official start date for the Government’s target for 1.2 million new well-located homes over five years kicking off in July, the recent re-acceleration of the CCCI could put additional pressure on an already difficult-to-achieve goal,” Izzy said.

Enjoying Sourceable articles? Subscribe for Free and receive daily updates of all articles which are published on our site

Want to grow your sales, reach more new clients and expand your client base across Australia’s design and construction sector?

Advertise on Sourceable and have your business seen by the thousands of architects, engineers, builders/construction contractors, subcontractors/trade contractors, property developers and building industry suppliers who read our stories across the civil, commercial and residential construction sector