{"id":11096,"date":"2022-12-20T08:00:00","date_gmt":"2022-12-19T21:00:00","guid":{"rendered":"https:\/\/stage.buildxact.com\/au\/?p=11096"},"modified":"2025-06-16T15:43:48","modified_gmt":"2025-06-16T05:43:48","slug":"building-material-prices","status":"publish","type":"post","link":"https:\/\/stage.buildxact.com\/au\/blog\/building-material-prices\/","title":{"rendered":"What to expect from building material prices"},"content":{"rendered":"\n

Among the most significant changes in the construction industry<\/a> in the past year have been the massive hike in building material prices and the overall construction cost<\/a> of a building a home. <\/p>\n\n\n\n

The rise in construction prices has contributed to significant construction material shortages, leading to enormous delays and even the cancellation of home projects<\/a> by multiple contractors.<\/p>\n\n\n\n

But what is set to change in the coming year, if anything? Will the industry see a reprieve, or will construction costs<\/a> climb unabated?<\/p>\n\n\n\n

Rising material costs felt across the market<\/strong><\/h2>\n\n\n\n

Unfortunately, the rising cost of just about everything has caused a massive stall<\/a> over the summer as inflation tightened its grip on the Australian construction industry<\/a>. The slowdown follows an enormous boom in the construction market before mid-2022. At that time, folks used COVID relief funds to invest in properties – property acquisition exploded, up 56% on the previous year<\/a>.<\/p>\n\n\n\n

No matter what part of the home construction industry, building material prices skyrocketed<\/a> this year. The steelmaking industry saw a massive 42.1% increase in cost, followed by timber at 20.1%; up over 10% were electrical, plumbing, glass product and aluminum.<\/p>\n\n\n\n

Why are building material prices rising?<\/strong><\/h2>\n\n\n\n

Building industry material prices across the construction industry have skyrocketed for a few reasons. Whether you\u2019re talking about concrete blocks, gypsum sheets, or even laminate flooring, prices are up. Experts see some consistent reasons why building<\/a> material prices have risen steadily.<\/p>\n\n\n\n

Shortages<\/h3>\n\n\n\n

There\u2019s been a general shortage of raw materials across the construction industry. A rush on the housing market has primarily caused this, followed by the inability of Australia to produce its materials, which results in the sky-high price of importing materials.<\/p>\n\n\n\n

For example, steel has a price increase that has left customers uneasy<\/a>. The lack of iron ore production<\/a> in China, upon which Australia depends for its steel-making material, further compounds already rising steel prices.<\/p>\n\n\n\n

Other shortages include sand<\/a> in the country\u2019s southwest. Used as an aggregate for concrete, sand shortages cause supply chain distribution issues in the concrete industry that drive up the cost of houses. As a result, Australian building supply companies must increase their overheads that pass on to the customer.<\/p>\n\n\n\n

Volatility of material prices<\/h3>\n\n\n\n

One of the most significant factors contributing to housing shortages in the market has been the volatility of material costs<\/a>. In particular, there have been increases in the cost of lining walls, including the cost of sheetrock and gypsum sheets. <\/p>\n\n\n\n

As the unpredictable nature of the global economy continues, with inflation biting hard, the cost of materials appears in a near-constant state of ebb and flow, which isn\u2019t good for construction costs in any part of the supply chain – from the source to the end-user.<\/p>\n\n\n\n

What are the cheapest building materials right now?<\/strong><\/h2>\n\n\n\n

Concrete and concrete products represent the lowest overall increase<\/a> in building materials in 2022. The average cement block price in Australia is $2.98+GST per unit.<\/p>\n\n\n\n

The next-cheapest material is cement – with cement products making up only a 7.1% increase in material costs.<\/p>\n\n\n\n

Producer Price Indexes (PPI)<\/strong><\/h2>\n\n\n\n

What are Producer Price Indexes?<\/h3>\n\n\n\n

Producer price indexes are cost comparisons curated<\/a> by the Australian Bureau of Statistics. The ABS releases this data annually to reflect the change in price from when a product leaves the manufacturer and begins its journey until it reaches the end consumer. <\/p>\n\n\n\n

Key statistics <\/h3>\n\n\n\n

A few key statistics encapsulate the current state of the Producer Price Index and give some idea of the state of the costs-of-production for multiple producers across the construction industry.<\/p>\n\n\n\n