Residential construction costs in Australia are rising at the slowest pace in over 20 years. This means it’s a favourable time for homeowners and property investors. After years of rapid growth, costs have stabilised, providing a positive outlook for those looking to enter the market.

Recent data from CoreLogic’s Cordell Construction Cost Index (CCCI) reveals that residential construction costs have stabilised. The Q2 2024 national CCCI showed a modest 0.5% rise, down from the 0.8% increase in Q1. Over the financial year 2024, annual costs rose by just 2.6%, the smallest annual increase since 2002.

Positive Impact on Homeowners and Investors

This stabilisation in construction costs is great news for potential homeowners and property investors. Although the prices are still high compared to pre-COVID, the slower growth rate means fewer unexpected cost spikes. This predictability can help homeowners plan their budgets more effectively and provide investors with more confidence.

The cost trends vary slightly across different regions:

  • Queensland: 0.3% increase
  • NSW and Victoria: 0.6% increase

John Bennett, CoreLogic’s Construction Cost Estimation Manager, noted that the overall slowdown is due to reduced pricing volatility. This is seen among key materials such as timber and metals. While labour costs remain high, the resolution of many supply chain issues that plagued the industry during COVID has contributed to the stabilisation.

Inflation and Building Approvals

Another positive aspect of the slowing construction cost growth is its potential impact on inflation. Nationally, the CPI rose by 1.0% in Q1 2024, while construction costs increased by only 0.8%. The 0.5% rise in Q2 suggests that construction cost growth may fall below CPI levels, helping to ease inflationary pressures related to housing.

In May 2024, building approvals rose by 5.5%, exceeding expectations. This uptick indicates a potential recovery in the construction sector, which has been sluggish since early 2023 due to a backlog of projects.

Now is the Time to Invest

Given the current trends, now is an excellent time for homeowners and investors to consider buying property. The stabilisation of construction costs, alongside the potential for improved builder profit margins, suggests a more predictable and potentially profitable environment for new builds and renovations. As the market adjusts and supply chain issues resolve, those entering the property market now can benefit from these positive changes.


The slowing growth of residential construction costs provides a bright outlook for homeowners and property investors. With costs stabilising and building approvals showing signs of recovery, the property market offers promising opportunities for those looking to invest or build. Now is a great time to explore property investment options and take advantage of these favourable conditions.