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New data from the Australian Bureau of Statistics (ABS) show house building cost pressures are at their worst in almost 2 years.
Master Builders Australia chief economist Shane Garrett said during the September 2025 quarter, the cost of building a new house rose by 1.2 per cent. This was the biggest quarterly jump since December 2023.
“It is now 44.8 per cent more expensive to build a new house than it was just before the pandemic.
“The acceleration in new house building costs is partly down to more expensive building materials. Over the year to September 2025 quarter, there was a 2.1 per cent uplift in house building material prices.
“This is the fastest pace of cost increase since late 2023, meaning house building material costs have surged by a total of 37.9 per cent since just before the pandemic.
“Most types of house building materials are more expensive than a year ago. Concrete, cement and sand products suffered the largest cost increases (+5.0 per cent) over the past year. Cement product prices were up by 3.2 per cent over the past year. However, the same period saw steel costs decline by 4.6 per cent.
“The deterioration in house building costs hurts the viability of new home building projects,” Mr Garrett said.
Master Builders Australia CEO Denita Wawn said today’s figures further hamper Australia’s chances of reaching the Housing Accord target, having suffered a 60,000-home building deficit in 2024–25, the first full year of the National Housing Accord’s term.
“Every cost increase pushes more projects out of reach and makes it harder to meet the Housing Accord target.
“There’s no single lever that will fix building cost inflation. It requires coordinated reform across planning, skills, taxation, and energy. Master Builders continues to call for a national approach to cut red tape, strengthen supply chains and lift productivity across the industry.
“Persistent worker shortages continue to drive up costs and delay projects, highlighting the urgent need for stronger training pipelines and employer support,” Ms Wawn concluded.
Media contact: Dee Zegarac, National Director, External Affairs and Engagement
0400 493 071 | dee.zegarac@masterbuilders.com.au