Australian building costs rise as Middle East oil crisis continues

Summarised from 2 outlets · Updated 20 Oct, 18:02 · Archive

Construction costs in Australia increased 3.2 per cent in the year to September, driven by rising plastic material prices linked to the Middle East oil crisis.

Construction costs in Australia accelerated in the September quarter, with a one per cent increase driven primarily by rising plastic building material prices. Over the 12 months to September, costs rose 3.2 per cent, up from 2.8 per cent in the previous 12 months, according to Cotality's Cordell Construction Cost Index released on Wednesday. This marks the second consecutive quarter of one per cent quarterly growth.

The Middle East oil crisis has sustained high oil prices, which flow through the construction sector in multiple ways. Elevated fuel prices add directly to costs for tradespeople's site visits and indirectly through material delivery charges. Master Plumbers ANZ chief executive Nathaniel Smith said workers 'are getting hit twice' from these dual impacts. Gyprock was another significant contributor to overall cost growth, alongside the broad increases across all plastic material categories.

Cordell costings estimation manager John Bennett said the acceleration represents a return to cost pressures seen in late 2024 and 2025, after brief subdued conditions earlier in 2026 had prompted expectations of sustained easing. However, the overall pace of cost growth remains well below long-term historical averages. Rising construction costs combined with falling house prices are squeezing the viability of new residential developments. Australia completed only 355,817 dwellings in the first two years of its goal to build 1.2 million new homes in five years, leaving the sector about 124,000 homes behind schedule.

How it is being reported

• Building costs climb as Middle East conflict drags onA rise in the price of plastic building materials drove a one per cent increase in construction costs in the September quarter, according to Cotality.The West Australian · 20 Oct, 17:33
• Building costs climb as Middle East conflict drags onA rise in the price of plastic building materials drove a one per cent increase in construction costs in the September quarter, according to Cotality.Perth Now · 20 Oct, 17:33

In this story: Cotality · Master Plumbers ANZ · Australian Bureau of Statistics · Australia

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem