HIA: Trade Material Costs Stabilise
The Housing Industry Association (HIA) has reported that the cost of building materials was unchanged in the September 2023 quarter for the first time since the pandemic.
GALLERY
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.
“The ABS Producer Price Index for house construction inputs saw a 0 percent change in the September 2023 quarter compared to the previous quarter,” HIA senior economist Tom Devitt says.
“This sees the cost of house building materials just 4.4 percent higher over the year, compared to a 17.3 percent 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.”
He adds that some of the worst affected products during the pandemic are now seeing outright declines in price.
“Last year, structural timber and reinforcing steel prices were both up by more than 60 percent on pre-pandemic levels. In the last year, they have declined by 8.8 percent and 5.3 percent respectively. Steel beams and sections, which were up by more than 50 percent a year ago, subsequently declined by 17.2 percent,” Tom explains.
“Most of Australia’s pandemic inflationary pressures came from building materials and fuel. As these pressures ease, it will provide more certainty of future house building costs, as well as hasten the need for a cut to interest rates.”
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