THE worst may be over for construction costs escalation, according to Napier & Blakeley, and while material cost increases still exist, focus has shifted to a premium on labour costs.

The construction market over the past 12 months has again been a challenging one, according to Napier & Blakeley’s latest Construction Costs Datacards, and the firm still expects 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,” director Craig Smith said.

Napier & Blakeley’s current cost escalation forecast for the 2024 financial year is 5% to 8% for residential construction, relating to timber framed buildings, and 5% to 7% for commercial construction – excepting Western Australia and Queensland, where it is tipping cost escalation to be in the order of 6% to 8% for residential construction and 7% to 9% for commercial construction. Continue reading →