Building material costs are rising again, with new ABS data showing prices increased 2.5% over the year to the March 2026 quarter - the sharpest annual jump since September 2023.
The increase, driven by higher transport and production costs linked to Middle East tensions and ongoing supply chain disruptions, is adding pressure to housing affordability and pushing up the cost of building new homes.
“Today’s figures don’t fully incorporate the effects of the Middle East crisis," said Master Builders Australia chief economist, Shane Garrett.
"Even so, they show that building materials cost inflation is gathering strength.
"The affordability of new homes is already deteriorating as a result, with the cost of a new house increasing by 4.1 per cent over the past year.”
“Almost every category of home building material has increased in price over the past 12 months.
"Electrical equipment is 6.3 per cent more expensive than a year ago while installed gas/electrical appliances cost 5.7 per cent more.”
Master Builders Australia CEO Denita Wawn says the Federal Government must do all it can to improve the affordability of building materials.
“Construction productivity is 21.5 per cent lower than it was just over a decade ago and continued escalations in labour and material costs will only make the situation worse," Wawn said.
"The Government needs a strong plan to address these pressures.
“Australia must support local manufacturing by reducing input costs while also not impeding the flow of good quality and compliant building materials from overseas.
“As outlined in our submission to the Senate Select Committee on Productivity, the market for building products and construction materials must be as competitive as possible to ensure choice, reliable supply and most importantly affordable prices,” said Wawn.
