Cost of Building Rises Further

The cost of building a new home is continuing to rise, according to new data released by the Australian Bureau of Statistics.

Its latest Producer Price Index Report says detached house construction prices increased by 1.1% during the December 2025 quarter - the second highest quarterly increase in more than two years.

In the six years since December 2019, construction costs have increased by 37.5%.

The data shows that South Australia had the biggest increase in construction costs during the December quarter of 2.4%, followed by Queensland and Western Australia which are both up by 2%.

The December quarter increases are largely driven by rising costs for the raw materials used in manufactured construction products.

The cost of terracotta tiles is up by 5.9%while timber, board and joinery is up by 0.4%, which means fencing and gates are up by 4.2%.

Cement products are up by 1.6%, with concrete tiles in particular up by 2.7%.

December 2025 analysis by Altus Group, Head of Development Advisory, Niall McSweeney, says rising energy costs mean producing materials for housing construction is more expensive.

“When electricity prices rise, they don’t just hit household bills. They lift the embedded cost of construction materials,” he says.