How the cost of building a new house just hit a record high
He also warned that the construction workforce is not large enough to build enough homes to meet the federal government's target of 1.2 million new homes in five years, and the ongoing infrastructure projects such as roads, schools and hospitals.
Not enough new workers were joining the industry, he said, especially as experienced workers retire or semi-retire.
'When you don't have enough workers, what happens? Workers go to the highest bidder and that means if you're going to go ahead with your project, you're going to be paying much higher wages.'
He said the cost of materials was generally much higher than six years ago, especially for timber, ceramic goods and electrical equipment.
But he thought it unlikely labour costs would decline, especially as some of the larger unions negotiate increases in wages from year to year.
Loading
Housing Industry Association senior economist Tom Devitt said the recent rise was largely due to labour cost increases, while the unemployment rate holds at historic lows.
'The shortage of skilled trades for construction sectors is particularly acute,' he said, calling for a boost to domestic workforce capabilities as well as skilled migration.
He noted changes to the National Construction Code to improve energy efficiency, which he thought was a worthwhile objective, but said it resulted in costs that were passed on to home buyers.
He added that the figures on the cost of building did not include the rising cost of land.
Despite the national target of 1.2 million new homes in five years, Devitt forecasts that the nation will struggle to deliver a million in that time frame.
'It doesn't bode well for affordability, especially for home buyers.'
Sydney builder Robert Faraj, director of Pioneer Building Group, has been dealing with the impact of rising materials costs on his projects.
For example, he made an order of plasterboard in mid-February. It was delivered on March 2, but on March 1 the supplier increased prices by 7 per cent, leaving him paying the March price.
That meant it cost $40,000 for enough plasterboard for four, four-bedroom houses. The product usually increases in price four times a year.
Electrical cable for light switches has increased, too, among others.
'It didn't jump $95 or $100 in a week. Every second month [the suppliers say] 'Oh hey, 10 per cent, 10 per cent, 10 per cent,'' he said.
But to maintain his reputation and the quality of his work, he does not want to look for the cheapest quote. He focuses on high-end, bespoke, luxury-built homes as well as commercial construction.
'You're judged on your worst job, not your best job, so we're always trying to maintain a standard and a value of what we give our clients,' he said.
He also can't charge clients more once they have agreed on a price for a build.
'How? They can't go back to the bank and say, 'hey bank, Robert said the plasterboard has gone up.''
As a result, he does not see quite as much work available as previously.
'Everyone's saying it's not worth it, so we're not seeing as much come through the pipeline of approvals of work,' he said.
'We've got some really good tradies in this country and most of them are busy at the moment doing all these tunnels.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
a day ago
- West Australian
Aussies exit NSW, WA hits 3 million population milestone
More people are fleeing NSW than any other state in Australia. Population data released by the Australian Bureau of Statistics this week shows 28,118 people left NSW in 2024. Western Australia tipped over three million people for the first time as the resource-rich state recorded the highest nationwide growth rate. At the end of 2024, 27.4 million people called Australia home, an increase of 445,900 on the previous year and representative of a 1.7 per cent increase. Commonwealth Bank economist Lucinda Jerogin said population growth had slowed quicker than anticipated on the back of the post-pandemic peak. 'A slowdown in natural increase continues to place a drag on Australia's population growth,' she said 'Cost-of-living pressures, rising female workforce participation and broader uncertainty are likely driving this downward trend. 'Growth in deaths are outpacing births leading to the decline in natural increase.' The data shows NSW lost more than 28,000 people to net interstate migration, with 112,763 people leaving for elsewhere in the country. Queensland picked up more than 106,000 people from other states for a result of nearly 26,000 fresh faces. Nearly 40,000 Aussies moved to WA for a net increase of about 12,500 people. While Queensland and Victoria's total populations grew by 1.9 per cent, WA's grew 2.4 per cent. The population of every state and territory grew by at least 1.1 per cent, except Tasmania, which recorded a 0.3 per cent increase. 'Within Australia, people are continuing to leave NSW, and to a lesser extent Victoria and the smallest jurisdictions, and head into Queensland and WA,' Housing Industry Association economist Tom Devitt said. 'But even the jurisdictions losing residents interstate are absorbing enough overseas arrivals to see their populations expand.' State governments needed to do more to stimulate housing construction, he said. 'Foreign capital is highly liquid. State governments have forced institutional investors into building apartments in other countries,' Mr Devitt said. 'As a consequence, multi-unit construction volumes in Australia have halved, likely costing state governments tax revenue.'
News.com.au
5 days ago
- News.com.au
HIA: stamp duty behind 500,000 less homes, $40k home loan hit
A desperate Aussie home buying tactic is costing owners upwards of $40,000, and it's largely because of their state government. A new Housing Industry Association report has revealed some of the jaw-dropping hidden costs of stamp duty taxes around the nation, including the added whack for purchasers who opt to borrow the money needed to cover the upfront tax. The Association's Stamp Duty Watch report released yesterday called for changes to the tax nationwide if Australia is to reach its 1.2 million new homes National Housing Accord target, but especially for states hitting foreign investors with the biggest additional costs. Australia's worst neighbours exposed Their figures indicate higher tax bills for foreign property investors had wiped out more than 500,000 new home builds nationwide across the past decade — significantly exacerbating the nation's current housing and rental crisis. For local homebuyers, HIA senior economist Tom Devitt said their calculations showed the typical homebuyer who borrowed to cover their stamp duty would be paying more than $40,000 in extra stamp duty costs in NSW, Victoria and South Australia. Stamp duty costs are set independently by state governments. Over the course of a 30 year loan at a 6.55 per cent average variable rate, Victoria's nation-topping 5.3 per cent stamp duty cost for a $729,000 typical home leads to a $38,810 stamp duty payment. Put that on your mortgage and it would cost you another $48,229, for an eye-watering total north of $81,000. Nationally, the average added cost would be $38,786 — on top of an initial $31,211 stamp duty for a $785,000 home. Queensland has the lowest stamp duty cost in the nation at 2.7 per cent, or about $21,220 for a $786,000 typical home. Adding that sum to your mortgage would add about $26,370 to the final mortgage bill over 30 years. Mr Devitt said that the added money lost from budgets would also lead to 'opportunity costs' — as households lost the option for investing the money instead, or for putting it towards other things such as holidays. The alternative for many homebuyers is to compromise on home features or location. While a smaller back yard was unlikely to have significant ramifications, Mr Devitt said a longer commute would not only cost owners more in petrol — but also came with 'environmental costs as people spend more time on freeways'. Smart Lending managing director Melissa Gielnik said it was generally a bad idea for buyers to borrow stamp duty costs. Banks will not allow for it without a guarantor over the loan, typically family, or without the buyers reducing their deposit — which would further increase the size of their mortgage. If a lender did let the buyer do it, there was a significant chance they would be facing lenders mortgage insurance costs they might have otherwise avoided. While scrapping the much maligned tax wouldn't directly add to the cost of homes, Ms Gielnik said it was likely a way would have to be found to stop vendors becoming greedy and demanding more money from prospective buyers — or prices would rise. The stamp duty costs for foreign investors have also had significant impacts on the nation's new home supply. HIA chief economist Tim Reardon estimated that with the number of new multi-unit dwellings effectively being halved for the past decade since state government's began adding additional stamp duty costs for foreign investors in 2015, Australia had missed out on more than 500,000 new homes. 'That would have had a substantial impact … if they had all happened, rental price growth would have been 2-3 per cent a year, rather than the 5-15 per cent that we have seen,' Mr Reardon said. 'We would be seeing rental vacancy rates above 3 per cent.' The economist added that 'close to 100 per cent' of any additional stamp duty costs paid by international investors developing apartment buildings would be passed on to buyers in heightened costs, or to tenants in higher rents. 'Government's can tax whoever they like, but the impost will be born by the Australian household in the end,' he said. With the federal government increasing migration for much of the past 10 years, the result had been increasing population amid lower incentives for foreign funds to support new builds — driving up home prices as well. The alternative was that they took their money elsewhere. 'If Sydney in Australia is going to tax you, upfront, an additional $160,000 compared to other countries, they (investors) will take that capital elsewhere — it's very liquid,' Mr Reardon said. 'And Australia's mum and dad investors don't have the capital to build apartment complexes,' Mr Reardon said. The economist added that without changes to stamp duty taxes, particularly for international buyers, there was no way for Australia to reach a 1.2 million new homes by 2029 target set as part of the National Housing Accord. FIRB stats show in the 2014-2015 financial year there were $60.8bn worth of Aussie home sales approved to internationals. In the 2023-2024 financial year there were just $6.6bn in foreign residential real estate sales in Australia. Latest stats show that in the first three months of the current financial year the figure was just $1.3bn.
The Advertiser
09-06-2025
- The Advertiser
Aussies urged to charge ahead with household batteries
Australia could slash $4 billion a year off power bills by the end of the decade if households embrace solar batteries in larger numbers, a report forecasts. The Climate Council issued the prediction on Tuesday, finding the savings were possible if half of all homes with solar panels installed added batteries by 2030. But progress could also get a bigger boost from allowing more electric vehicles to charge up the national grid, if solar battery prices continued to fall, and if all new households were designed for rooftop solar and battery systems, it found. The report comes amid heightened demand for home batteries after the announcement of a $2.3 billion federal government scheme to subsidise their purchase by 30 per cent from July. The Climate Council report, called Battery Boom, found about 300,000 (eight per cent) of the four million Australian households with solar panels used batteries to store energy. If that figure was lifted to reach two million homes by 2030 - half of those with rooftop solar panels currently installed - household energy bill savings could hit $4 billion a year. Electricity bill savings could rise from $1500 with solar panels to $2300 a year after installing a battery, Climate Council spokesman Greg Bourne said, although further support would be needed to help some families deal with the up-front cost. "Batteries haven't penetrated far enough into those four million (solar) households, but it makes a huge difference when you start picking up the sunshine from midday and time-shifting it to when high cost of electricity comes in," he told AAP. "It will start as word-of-mouth in the neighbourhood and talk of 'my bill's half of what it was' or 'my bills are a quarter of what they were because we put a battery in' and that's part of the education process." A typical household battery is expected to cover its cost within 8.3 years without the upcoming subsidy, the report found, down from 10 years in 2022. The Climate Council report also found big battery storage projects planned for Australia had doubled over the past year to reach 20 gigawatts, and the price of large energy storage had fallen by 20 per cent. On a state-by-state basis, Western Australia led the nation for the most big battery projects with eight installed, Victoria boasted the most community solar batteries, and the Northern Territory had the most homes with solar batteries installed at 15.9 per cent. Battery storage could also get a significant boost from compatible electric vehicles, Mr Bourne said, as more vehicle-to-grid chargers were standardised and sold in Australia. Other recommendations in the report to boost battery storage included adding rooftop solar and storage capacity to the National Construction Code, expanding support for community batteries, and strengthening on-shore battery recycling schemes. Australia could slash $4 billion a year off power bills by the end of the decade if households embrace solar batteries in larger numbers, a report forecasts. The Climate Council issued the prediction on Tuesday, finding the savings were possible if half of all homes with solar panels installed added batteries by 2030. But progress could also get a bigger boost from allowing more electric vehicles to charge up the national grid, if solar battery prices continued to fall, and if all new households were designed for rooftop solar and battery systems, it found. The report comes amid heightened demand for home batteries after the announcement of a $2.3 billion federal government scheme to subsidise their purchase by 30 per cent from July. The Climate Council report, called Battery Boom, found about 300,000 (eight per cent) of the four million Australian households with solar panels used batteries to store energy. If that figure was lifted to reach two million homes by 2030 - half of those with rooftop solar panels currently installed - household energy bill savings could hit $4 billion a year. Electricity bill savings could rise from $1500 with solar panels to $2300 a year after installing a battery, Climate Council spokesman Greg Bourne said, although further support would be needed to help some families deal with the up-front cost. "Batteries haven't penetrated far enough into those four million (solar) households, but it makes a huge difference when you start picking up the sunshine from midday and time-shifting it to when high cost of electricity comes in," he told AAP. "It will start as word-of-mouth in the neighbourhood and talk of 'my bill's half of what it was' or 'my bills are a quarter of what they were because we put a battery in' and that's part of the education process." A typical household battery is expected to cover its cost within 8.3 years without the upcoming subsidy, the report found, down from 10 years in 2022. The Climate Council report also found big battery storage projects planned for Australia had doubled over the past year to reach 20 gigawatts, and the price of large energy storage had fallen by 20 per cent. On a state-by-state basis, Western Australia led the nation for the most big battery projects with eight installed, Victoria boasted the most community solar batteries, and the Northern Territory had the most homes with solar batteries installed at 15.9 per cent. Battery storage could also get a significant boost from compatible electric vehicles, Mr Bourne said, as more vehicle-to-grid chargers were standardised and sold in Australia. Other recommendations in the report to boost battery storage included adding rooftop solar and storage capacity to the National Construction Code, expanding support for community batteries, and strengthening on-shore battery recycling schemes. Australia could slash $4 billion a year off power bills by the end of the decade if households embrace solar batteries in larger numbers, a report forecasts. The Climate Council issued the prediction on Tuesday, finding the savings were possible if half of all homes with solar panels installed added batteries by 2030. But progress could also get a bigger boost from allowing more electric vehicles to charge up the national grid, if solar battery prices continued to fall, and if all new households were designed for rooftop solar and battery systems, it found. The report comes amid heightened demand for home batteries after the announcement of a $2.3 billion federal government scheme to subsidise their purchase by 30 per cent from July. The Climate Council report, called Battery Boom, found about 300,000 (eight per cent) of the four million Australian households with solar panels used batteries to store energy. If that figure was lifted to reach two million homes by 2030 - half of those with rooftop solar panels currently installed - household energy bill savings could hit $4 billion a year. Electricity bill savings could rise from $1500 with solar panels to $2300 a year after installing a battery, Climate Council spokesman Greg Bourne said, although further support would be needed to help some families deal with the up-front cost. "Batteries haven't penetrated far enough into those four million (solar) households, but it makes a huge difference when you start picking up the sunshine from midday and time-shifting it to when high cost of electricity comes in," he told AAP. "It will start as word-of-mouth in the neighbourhood and talk of 'my bill's half of what it was' or 'my bills are a quarter of what they were because we put a battery in' and that's part of the education process." A typical household battery is expected to cover its cost within 8.3 years without the upcoming subsidy, the report found, down from 10 years in 2022. The Climate Council report also found big battery storage projects planned for Australia had doubled over the past year to reach 20 gigawatts, and the price of large energy storage had fallen by 20 per cent. On a state-by-state basis, Western Australia led the nation for the most big battery projects with eight installed, Victoria boasted the most community solar batteries, and the Northern Territory had the most homes with solar batteries installed at 15.9 per cent. Battery storage could also get a significant boost from compatible electric vehicles, Mr Bourne said, as more vehicle-to-grid chargers were standardised and sold in Australia. Other recommendations in the report to boost battery storage included adding rooftop solar and storage capacity to the National Construction Code, expanding support for community batteries, and strengthening on-shore battery recycling schemes. Australia could slash $4 billion a year off power bills by the end of the decade if households embrace solar batteries in larger numbers, a report forecasts. The Climate Council issued the prediction on Tuesday, finding the savings were possible if half of all homes with solar panels installed added batteries by 2030. But progress could also get a bigger boost from allowing more electric vehicles to charge up the national grid, if solar battery prices continued to fall, and if all new households were designed for rooftop solar and battery systems, it found. The report comes amid heightened demand for home batteries after the announcement of a $2.3 billion federal government scheme to subsidise their purchase by 30 per cent from July. The Climate Council report, called Battery Boom, found about 300,000 (eight per cent) of the four million Australian households with solar panels used batteries to store energy. If that figure was lifted to reach two million homes by 2030 - half of those with rooftop solar panels currently installed - household energy bill savings could hit $4 billion a year. Electricity bill savings could rise from $1500 with solar panels to $2300 a year after installing a battery, Climate Council spokesman Greg Bourne said, although further support would be needed to help some families deal with the up-front cost. "Batteries haven't penetrated far enough into those four million (solar) households, but it makes a huge difference when you start picking up the sunshine from midday and time-shifting it to when high cost of electricity comes in," he told AAP. "It will start as word-of-mouth in the neighbourhood and talk of 'my bill's half of what it was' or 'my bills are a quarter of what they were because we put a battery in' and that's part of the education process." A typical household battery is expected to cover its cost within 8.3 years without the upcoming subsidy, the report found, down from 10 years in 2022. The Climate Council report also found big battery storage projects planned for Australia had doubled over the past year to reach 20 gigawatts, and the price of large energy storage had fallen by 20 per cent. On a state-by-state basis, Western Australia led the nation for the most big battery projects with eight installed, Victoria boasted the most community solar batteries, and the Northern Territory had the most homes with solar batteries installed at 15.9 per cent. Battery storage could also get a significant boost from compatible electric vehicles, Mr Bourne said, as more vehicle-to-grid chargers were standardised and sold in Australia. Other recommendations in the report to boost battery storage included adding rooftop solar and storage capacity to the National Construction Code, expanding support for community batteries, and strengthening on-shore battery recycling schemes.
