The cost of building a standard house rose 1.7% in the September quarter, the fastest quarterly increase since late 2022, according to Cotality's Cordell Construction Cost Index.
The index tracks a single-storey, three-bedroom, two-bathroom brick-and-tile home. Quarterly rises in the previous three quarters ranged from 0.9% to 1.1%. Annual growth lifted from 3.5% to 4.8%, above the long-term average of 4.0%.
Cotality pointed to higher material, freight and fuel costs, with petroleum-based products such as plumbing inputs, PVC, sealants and roof tiles among those affected. Materials make up about half of the index and wages about 40%.
Builders had absorbed some increases, particularly on fixed-price contracts, but Cotality said those pressures are now being passed through. It warned further rises could follow as input costs flow into new projects.
The result creates an awkward gap for buyers and developers: building is getting dearer while values for existing homes have been falling, which can squeeze the margin on new construction.
