Construction costs have undergone their highest-ever increase, which could push up the price of new and existing homes by another $100,000 on the Sunshine Coast, an economist has predicted.
The construction industry is facing a major supply crisis that has forced many builders to down tools before they hit the wall.
Ray White chief economist Nerida Conisbee said construction costs were up 9 per cent, the largest increase on record (excluding the year the GST was introduced).
Construction industry insolvencies were up 30 per cent over a 12-month.
Ms Conisbee said the industry was facing numerous challenges that would have flow-on effects to established house prices, which had already exploded more than 60 per cent during the pandemic.
The median on the Sunshine Coast is now $1.108 million, the second highest in the country behind Sydney and ahead of Canberra.
Ms Conisbee predicted Coast home prices could surge at least another 9 per cent — but likely more — to account for the extra cost of building, which would also impact existing homes.
This equated to an increase of $100,000 based on the current median, pushing it up to $1.208 million.
“For a new build, it would be 9 per cent, but in reality it’s more because of situations like builders not going ahead, backlogs of projects and infrastructure,” she said.
How much does it coast to build a house in 2022? https://www.realestate.com.au/advice/how-much-does-it-cost-to-build-a-house/