2022 – 2023 Have Building Costs Increased in Melbourne?

Building costs in Melbourne have ballooned 20% in the last 12 months

 

 

The cost of building materials has increased significantly in recent years across Australia, and Melbourne is no exception. According to various sources, building costs in Melbourne have ballooned 20% in the last 12 months, and the trend is expected to continue.

Matt Saunderson, a quantity surveyor who assesses the costs of major building contracts, estimated that the cost of building materials had risen by about 20% in a year, resulting in at least a $100,000 increase in the cost of an average project home worth $400,000 [Source].

In the year to September 2021, the average cost of supplies used in home building rose 10.2% in Melbourne compared to 5.9% in Sydney and 8% on average across Australian cities [Source].

 

Material cost increases

Furthermore, the My Housing Market House Building Cost Index increased by 1.3% over the January quarter in 2022, resulting in an annual increase of 17.1% [Source].

The Cordell Construction Cost Index reported that nationally, the annual CCCI increase was 7.1%, the highest yearly growth rate since March 2005, and Melbourne had the highest increase in tender prices in 2021, with a forecasted increase of 1.5% by the end of the year [Source A ,Source B].

 

Demand for labour on the rise

In addition to the rise in material costs, there has been a significant increase in demand for labour, which has contributed to the overall increase in building costs in Melbourne and other cities across Australia.

In Melbourne, building costs are $2576 per square meter, the highest in the country, followed by Brisbane ($2448 per square meter), Perth ($2142 per square meter), and Adelaide ($2070 per square meter) [Source].

Unfortunately, the current challenges are not expected to end any time soon. Increasing material costs and supply chain issues inflating demand for already expensive materials will continue to fuel the price expansion for some time to come.

The good news is that there are strategies available for managing costs in an unpredictable market. One of the most effective tools is to partner with professional building cost estimators during planning and building. Building costs estimators use their significant expertise and connections in the industry to identify cost-saving opportunities across the breadth of a construction project.

 

Use a building cost estimator and get into your new home faster

Construction cost estimators like Newin Building Estimating Services remove much of the hassle and uncertainty of new home builds, creating an excellent resource for overcoming the current spate of challenges. By using professional connections in the building industry and drawing on their decades of experience, Newin can help new home buyers more accurately estimate building costs and ensure their project remains on schedule. Call today to find out more.

 

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