2023 Napier & Blakeley Construction Cost Datacards
Napier & Blakeley have provided cost advice to all sectors of the construction and development industries for over 38 years and are pleased to provide our updated Construction Cost Datacards:
As has been our annual tradition for the past 24 years, we are proud to publish our construction cost Datacards for July 2023 which reflects our experience of project construction costs observed over the past 12 months and are presented at current day costs. These costs have been sourced from approximately 600 projects that we advised on last year.
The construction market over the past 12 months has again been a challenging one with the market experiencing strong cost increases in the second half 2022. In the first half of 2023, the material cost increases have calmed however they still exist with a premium on labour costs now more of the focus.
Some further observations over the past 12 months are noted below:
| 1. | Contractors still including cost escalation/risk allowances in their tender; |
| 2. | Shipping costs reducing; |
| 3. | Reinforcement & steel prices steadying however building services works, brickwork, concrete, precast concrete & plasterboard prices increasing; |
| 4. | Some sub-contractors supplying labour only quotations to Contractors (with the Contractor therefore required to purchase materials and absorb the risk of cost increase of materials); |
| 5. | Building approvals falling; and |
| 6. | General inflationary pressure on the cost of labour. |
So what does the next 12 months look like? We still expect upward pressure on costs to continue in the short to medium term. However, in regard to the recent significant price increases in some material prices, whilst we believe the worst is over, we still expect some upward pressure on costs to continue, with the market taking some time to assess that the risk and rate of significant future price increases are over or at least reduced.
In summary, our general current cost escalation forecast for the 2023/2024 financial year is 5%-8% for residential construction (relating to timber framed buildings) and 5%-7% for commercial construction excepting Western Australia and Queensland where we are expecting cost escalation to be in the order of 6%-8% for residential construction and 7%-9% for commercial construction. Of course, this is a general guide only and the project type and location will affect these expectations.
Our Quantity Surveying team is able to provide the following services for your projects:
- Cost Planning, Cost Control & Value Management
- Reporting to the Project Financier (we are accepted by all major lending institutions)
- Bills of Quantities and Contract Administration
- Capital Expenditure Forecasting for Property Owners
- Maintenance Reserve and Capital Replacement Funds Forecasting
- Insurance Replacement Cost Assessments
- Tax Depreciation
Contact us for a datacard hard copy or for any other Napier & Blakeley service.
For further information on our Development Advisory & Quantity Surveying services please contact our team.
MELBOURNE
Rob Howells, Managing Director | 0437 649 082 | rhowells@napierblakeley.com
Peter Frith, Director | 0437 649 082 | pfrith@napierblakeley.com
Craig Smith, Director | 0407 371 664 | csmith@napierblakeley.com
Ian Gardner, Director | 0488 225 569 | igardner@napierblakeley.com
John Atkins, Director | 0456 644 052 | jatkins@napierblakeley.com
SYDNEY
Alastair Walker, Director | 0419 503 289 | awalker@napierblakeley.com
Peter Hammond, Director | 0419 980 901 | phammond@napierblakeley.com
Michael Ross, National Head of Tax | 0403 841 175 | mross@napierblakeley.com
Stephen Cooke, Associate Director | 0409 228 552 | scooke@napierblakeley.com
BRISBANE
Paul Cosker, Director | 0434 400 107 | pcosker@napierblakeley.com
Gavin Peach, Associate Director | 0412 225 781 | gpeach@napierblakeley.com
KY Pih, Associate | 0408 933 660 | kpih@napierblakeley.com
PERTH
Graham Rigby, Associate Director | 0419 847 998 | grigby@napierblakeley.com
Scott Muirden, Director | 0450 393 099 | smuirden@napierblakeley.com
ADELAIDE
Sam Grindley, Senior Associate | 0460 032 142 | sgrindley@napierblakeley.com
