Napier & Blakeley have provided cost advice to all sectors of the construction and development industries for over 37 years and are pleased to provide our updated Construction Costs Datacards:

The construction market over the past 12 months has certainly been a challenging one as developers, builders, suppliers, sub-contractors have all faced the same problem – rising costs and resource shortages.

With material costs for timber and steel experiencing general price rises of up to 40% and 50% respectively, with some specific price rises being well above those, all market participants have been struggling to keep ahead of the constant changes, which unfortunately has seen some builders and sub-contractors not survive.

As has been our annual tradition for the past 23 years, we are proud to publish our construction cost datacards for July 2022 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.

So what are we expecting in the near future?  This is a difficult question to answer with factors such as global supply chain issues, COVID-19, shipping costs, interest rates, government responses globally to stimulate economies, inflation, iron ore price volatility, $AUD volatility, general demand and of course the geopolitical climate all affecting the cost of material and labour (and therefore construction costs).

However, in regard to the significant price increases in timber and steel, whilst we believe the worst is over, we still expect some upward pressure on costs to continue in the short to medium term, with the market taking some time to assess that the rate of future price increases of significance are over or at least reduced.

In summary, our general current cost escalation forecast for the 2022/2023 financial year is 8-10% for residential type construction (relating to timber framed buildings) and 6-8% for commercial construction.  Of course, this is a general guide only and the project type and location will affect these expectations.

Therefore, feel free to contact us to discuss your next project as the construction cost market remains fluid at the moment and as we have all seen recently, the world can change a lot in 12 months and as a result construction costs are constantly changing.