The cost of building materials in Australia has increased by more than 50 per cent in the past decade, with prices up by more in the most recent 12 months than they were a decade ago, according to the Australian Bureau of Statistics.
It’s now the most expensive nation in the world to build, according the ABS, which compiled the statistics for the third year running.
It has been on a steady climb for more than a decade, but is now more expensive than every other OECD country except Greece, according a report published last week.
In 2012, the ABS reported that Australia’s annual cost to build was $1.6 billion.
The ABS has been monitoring the building market for more years than any other government agency, compiling the most accurate and complete national data on the construction industry.
The price of materials and equipment is the biggest driver of cost increases, the report said.
“In recent years, the price of building construction materials has increased faster than inflation, and it’s on track to become the world’s most expensive building material,” the report’s author, Greg Barton, told the ABC.
The report said the cost of materials was increasing at a rate of 10 per cent per year for the past five years.
While the average price of new building materials rose by 6.6 per cent a year between 2007 and 2014, the average annual rate of increase was 8.4 per cent.
In other words, prices were rising at an average rate of 3 per cent every year for five years, but over the past four decades they have more than doubled.
The study also found that the average cost of a new home was now about $500,000 more than in 2007, the year of the last ABS survey.
It noted that in 2015, construction firms are investing in building systems with “higher-resolution, automated systems”.
The ABS said it has taken measures to keep costs under control, including implementing an “energy conservation program”, which “helps reduce the need for large-scale construction and development projects”.
In 2015, the government introduced an energy conservation policy for all new construction projects in the country.