Victorian construction industry moves away from volatility

It has been a rollercoaster ride for the building and construction industry as the dust starts to settle on the supply chain disruption that has put upward pressure on input coasts.

New data from the Australian Bureau of Statistics (ABS) shows that for the year to September 2023, all materials used in house building had risen by a modest 2.5 percent in Melbourne as compared to an overall 4.4 per cent nationally, and as much as a 5.4 per cent increase in Sydney, 5.9 per cent in Brisbane and 6.3 per cent in Perth.

Looking at just the September 2023 quarter, Melbourne actually witnessed a drop in the cost of inputs with a 0.4 per cent fall, while nationally and in Sydney the rate remained flat, while there were minor increases across Brisbane, Perth and Hobart.

These latest figures analysed by Master Builders Australia have shown Victorians are faring marginally better that most other states, in relation to the cost of inputs to the housing construction industry.

Master Builders Victoria chief executive officer Michaela Lihou said the latest figures were indicative of a small but welcome move away from the past volatility in the Victorian market for essential construction inputs.

“Unfortunately, building product prices are now 33 per cent higher than they were right before the pandemic and that impact is being felt right across the sector.

“But we are now seeing both positive and negative fluctuations across products.”

During the September 2023 quarter, there were drops in the cost of several building product categories:

• Steel prices fell by 1.8 per cent
• Electrical equipment costs dropped by 1.1 per cent, and
• Timber, board and joinery prices dipped by 0.8 per cent.
• However, other categories of products increased during the same period:
• Ceramic product prices rose 1.9 per cent
• Installed gas and electrical appliance rose 1.6 per cent, and
• Concrete, cement and sand prices were up 1.4 per cent.

“While obviously we’d like to see these figures further correct, we do take some comfort in seeing some numbers beginning to stabilise to some degree,” Ms Lihou said.