After two years of steadily rising construction costs for new homes and renovations, there is finally some positive news. CoreLogic’s Cordell Construction Cost Index (CCCI) indicates a slowdown in the growth rate of construction costs. In Q1 2023, the index reported a 0.9% growth rate which is significantly lower than the 1.9% recorded in Q4 2022. Additionally, the annual growth rate has eased from its peak of 11.9% in the 12 months to December 2022. While the industry is encouraged by the quarterly figure returning to long-term averages, it’s important to note that annual growth remains 2.8 times higher than the pre-COVID five-year average.
The CCCI highlights that although there has been a gradual easing in the growth of construction costs, the market remains unstable due to volatile pricing caused by restricted domestic supply chains, material, and labour shortages. CoreLogic Research Director Tim Lawless says that while construction costs continue to increase, there has been a notable shift in the established housing market, with a month-on-month increase in CoreLogic’s national Home Value Index for March. Lawless also points out that the construction industry will continue to face challenging conditions due to a sustained increase in the number of houses under construction.
Blog
Other articles
Australia’s Housing Market in Transition
Australia is seeing a significant decline in approvals for attached homes, such as apartments, townhouses, and semi-detached homes. These types of housing are essential for creating more sustainable urban development, using existing infrastructure like public transport, schools, and healthcare services.
Rents Ease After 5-Year Boom
CoreLogic Australia’s economist, Kaitlyn Ezzy, reported a recent slowdown in rent increases, a notable shift after a 39.7% surge in rental prices over the past five years.
Are Luxury Suburbs Losing Their Shine?
House prices in some Sydney suburbs with medians of $2 million or more have declined by up to 7.5% in the past three months due to affordability issues and interest rate uncertainties, CoreLogic reports.
How Are Borrowers Coping with High Interest Rates?
Recent data shows that four out of five borrowers have tightened their budgets to manage home loan repayments amidst high interest rates.
What Makes New Homes So Attractive to Buyers?
Property views for new homes have surged by 9% this year compared to last year, with inquiries soaring by 27%. In general, views for all properties for sale have risen by 7%, and inquiries have increased by 11%.
Why Affordable Homes Are Hot
Securing a home has become harder due to rising prices and reduced borrowing capacities. Many people are now looking for more affordable properties.
Is Victoria’s Property Market Meeting the Needs of First-Time Buyers?
In the first three months of 2024, more foreign investors bought properties in a new Victorian development than local investors did. A report from a major bank shows that fewer first-time home buyers are purchasing new builds, putting pressure on affordable homes in the city.
May Housing Market Report
Mid-sized capitals in Australia are experiencing notable growth in home values. In May, home values increased by 2.0% in Perth, 1.8% in Adelaide, and 1.4% in Brisbane.
Estimating Your Super before Retirement
Determining how much superannuation you’ll need for retirement hinges on two main factors:
How Cash Rates Drive Housing Dynamics
The transmission of monetary policy through cash rate changes to mortgage rates is a critical aspect of understanding economic dynamics, especially in a country like Australia with a significant proportion of variable-rate mortgage holders.