Residential construction costs in Australia rose by 0.8% over the first three months of the year, marking the sixth quarter of muted increase, according to CoreLogic's Cordell Housing Index Price (CHIP) Report.
For the past six months, the growth in construction did not exceed 1%. On an annual basis, national residential construction costs grew by 3.3%.
Tim Lawless, research director at CoreLogic, said the surge in dwelling approvals has yet to make a significant impact on construction costs.
"With dwelling approvals surging in response to the recently expired HomeBuilder grant, the residential construction sector is moving into what is likely to be an extended period of activity. However, we are yet to see Cordell’s measure of construction costs reflect any material increase," he said.
Figures from the Australian Bureau of Statistics show that the total number of dwellings approved increased by 17.4% in March, building on the surge of 20.1% in February.
However, job creation in the construction industry, which accounts for around 8.9% of the total workforce, declined by 1.5% during the March quarter.
"Although construction costs rose at a slightly slower than average pace last quarter, it’s likely future quarters will record a more substantial lift in construction costs as shortages of both materials and labour add some upwards pressure on prices," Lawless said.
