Surging construction costs have made many projects unviable, with a number of developers deciding to shelve projects until next year when prices are expected to ease.
Quantity surveying firm Rider Levett Bucknall (RLB) predicts increases in construction costs will slow from 11.5% this year to 5.5% in 2023 on the Gold
Coast while in Melbourne they are expected to halve to 4%.
In Sydney, cost increases are forecast to drop from 6.9% to 3.9%.
RLB Ocean head of research Domenic Schiafone expects pressure on supply chains will start to ease by the end of this year.
“This easing of demand should allow manufacturing and logistics to get back to normality,” he says. “The easing of demand should also see a softening of material prices, with the high levels of ‘demand-led price premiums’ reducing due to lessening demand.”
Home-building costs were one of the key factors driving up Australia’s inflation figures with new dwelling prices by 20.3% in the past year.