Where are building prices going in 2022?
If you are choosing a builder with a lower price and who charging a lower margin beware! You could be in for some trouble.
NSW can report that building material costs are now increasing at their fastest rate since 1980. Right across Australia, the cost of materials used in house building has increased by +4.2 per cent during the March 2022 quarter and are now +15.4 per cent higher than a year ago (see charts below).
The pace of increase was similar across all six capital cities. Over the year to March 2022, the sharpest price increases included:
Reinforcing steel (+43.5 per cent)
Steel beams/sections (+41.5 per cent)
Structural timber (+39.2 per cent)
Plywood and board (+29.8 per cent)
Electrical cable and conduit (+27.1 per cent)
Plastic pipes and fittings (+26.5 per cent)
Copper pipes and fittings (+25.7 per cent)
Terracotta tiles (+21.5 per cent)
Metal roofing and guttering (+19.9 per cent)
Insulation (+14.0 per cent)
Your typical builder simply cannot absorb these increases and needs to be so vigilant, keeping in front of the price increases, your builder needs be be incorporating these prices into the job, and yes you will find that your build will be significantly more expensive than a year ago.
And don’t think this is the builders problem, because when he starts to struggle financially it may become your problem.
Some may think to delay their build but don’t expect prices to come down.
It is prudent to choose a builder who is thorough and has priced your job accurately, and if you pay your builder for his time to do this you can expect this to be accurate and to not have a problem half way through the build.
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