Home building costs rise 7.3% year-on-year

The supply chain shortages that have affected so many industries have hit property as well, with residential construction costs rising at the fastest annual rate since 2005.

Home building costs rose 7.3% in the 2021 calendar year, according to CoreLogic’s Cordell Construction Cost Index (CCCI).

That said, the pace of growth might be trending down, with costs rising 3.8% in the September quarter but only 1.1% in the December quarter.

Part of the reason costs are rising is because builders are struggling to get their hands on materials such as timber and metal products.

Property developers and home builders are likely to be passing on at least some of these increased costs to people buying homes.