Residential construction costs growth hits 15-year low as it rose just by 0.4% in the March quarter. This is the lowest quarterly increase since 2010, according to the Cordell Construction Cost Index. As a result, annual cost growth fell from 4.0% in the December quarter to 3.4% in the March quarter.
However, building costs have risen 31.3% since the start of the pandemic in March 2020, so this slowdown in price growth is coming off a high base.
Builders across the country continue to face significant challenges, particularly in managing rising supply costs and navigating an ongoing shortage of skilled tradespeople. These pressures have made it increasingly difficult for many construction firms to maintain timelines and control project budgets.
Despite these obstacles, residential construction activity remains robust nationwide. According to a recent report by multinational construction group RLB, there were 487 residential construction cranes in operation during the first quarter of 2025. Although this figure represents a 9.8% decline compared to the 540 cranes recorded in the same quarter of the previous year, it still reflects a relatively high level of building activity by historical standards. This sustained demand suggests that while the industry is under strain, the appetite for new housing—driven by population growth and housing shortages—continues to fuel strong levels of construction.
If you are looking at building your home, Contact Us and I can help you secure a pre-approval for a construction loan, which will give you clarity around your budget. I can also explain how construction loans work, so you can begin the process with confidence.