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CoreLogic has warned that residential construction costs are likely to rise further in the March quarter, citing factors such as ongoing supply chain disruptions.
CoreLogic’s Cordell Construction Cost Index rose by just 1.1% in the final three months of 2021, compared with 3.8% in the September quarter. The index rose by 7.3% in the year to December, its highest annual increase since March 2005.
Tim Lawless, CoreLogic’s head of research, says the big rise in annual construction costs might increase the cost of new homes and renovations, which may in turn put upward pressure on inflation:
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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