House building material costs stabilise

The cost of house-building materials was unchanged in the September quarter of 2023, stabilising for the first time since the pandemic according to the Housing Industry Association (HIA).

The Australian Bureau of Statistics (ABS) released its Producer Price Indexes for the September Quarter 2023, for a range of industries, including mining, manufacturing, construction and services industries.

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“The ABS Producer Price Index for house construction inputs saw a 0.0% change in the September 2023 quarter compared to the previous quarter,” HIA senior economist Tom Devitt explains.

The cost of house building materials is just 4.4% higher over the year, compared to a 17.3% annual increase in 2021-22.

“The slowing in cost of house building inputs reflects a significant easing in the materials constraints that plagued the industry during the pandemic,” Tom says.

“Some of the worst affected products during the pandemic are now seeing outright declines in price.”

Tom says that last year, structural timber and reinforcing steel prices were both up by more than 60% on pre-pandemic levels.

“In the past year, these two materials have declined by 8.8% and 5.3% respectively. Steel beams and sections, which were up by more than 50% a year ago, subsequently declined by 17.2%. Most of Australia’s pandemic inflationary pressures came from building materials and fuel,” he says.

The HIA believes that as these pressures ease, there will be greater certainty for the future of the building and construction industry.

Image courtesy of Markus Winkler on Unsplash.

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