Construction Prices Jump

The cost of building an average house has already increased by 1% since the start of the war in the Middle East.

While 1% may not sound like much, that equates to $3,500 t0 $4,000 on a fairly standard build.

The HIA is warning that the fuel-driven increase in the cost of construction alone is likely to keep a lid on the number of purchases of new homes this year.

Master Builders Australia says many builders on fixed‑price contracts are being forced to absorb much higher bills for fuel, concrete and even plastic pipes, which are up by between 20% and 30%.

Master Builders CEO Paul Bidwell says building companies are reporting rises across the board.

“From early on, we’ve been hearing consistent reports of materials cost hikes of between 5% and 50% and the cost to build a new house rising by $10,000 to $15,000,” he says.

ASIC data shows 3,490 construction companies became insolvent in 2025.