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Housing construction costs continue to rise

Housing construction costs continue to rise

by Emma Ryan | November 07, 2019 | 1 minute read

New research has found that the growth in housing construction costs continues to outpace inflation.

House construction
November 07, 2019

According to CoreLogic’s latest residential construction costs report (Cordell Housing Index Price or CHIP), costs associated with housing construction continued to rise over the September quarter. This represents quarterly growth of 1.1 per cent and annual growth of 3.7 per cent.

State-by-state breakdown


NSW

September NSW CHIP Index: 291.5

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Quarterly Growth: 1.2 per cent

Annual Growth: 4.3 per cent

VIC

September Vic CHIP Index: 279.3

Quarterly Growth: 1.2 per cent

Annual Growth: 3.9 per cent 


QLD

September Qld CHIP Index: 304.7

Quarterly Growth: 1.0 per cent

Annual Growth: 3.4 per cent

WA

September WA CHIP Index: 284.9

Quarterly Growth: 0.8 per cent

Annual Growth: 2.7 per cent


SA

September SA CHIP Index: 267.1

Quarterly Growth: 0.5 per cent

Annual Growth: 2.6 per cent


The research also pinpointed the “market influencers” driving this trend. It found that growth in employment within the construction industry is a key influencer, with employment rates increasing 1.2 per cent over the three months to August 2019, rising 0.5 per cent year-on-year. 
Over the past five years, employment in the construction industry has increased by 14.1 per cent, ABS statistics showed.

Another key influencer was touted as the RBA’s decision to lower the cash rate to record-low levels. 

“Lower interest rates, together with a subtle loosening in credit policies and improved housing sentiment, [have] seen the housing market make further progress towards a recovery,” CoreLogic said.

Furthermore, dwelling approvals trending lower was also identified as a key influencer. According to CoreLogic, dwelling approvals are down 19 per cent in comparison with last year. “However, stronger housing conditions should help support the residential construction sector over time.” 

About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of editorial at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]com.au

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