Sydney has retaken its crown as the most expensive city to in Australia to build in, regaining the number one position from Perth, with an average cost of US$2,950 (A$4,413) per m2.
According to Turner & Townsend, Perth has dropped to the second most expensive city to build in, at US$2,633 (A$3,938) per m2 followed by Brisbane (US$2,561 (A$3,381) per m2), Melbourne (US$2,540 (A$3,799) per m2) and Adelaide (US$2,382 (A$3,413) per m2).
Matt Billingham, Australia and New Zealand Real Estate Lead at Turner & Townsend, said Sydney has historically been the msot expensive place to build in Australia.
“While currently active, Australia’s construction markets are expected to cool, as challenges associated with the high cost of construction, skilled labour shortages and market capacity constraints slow new supply,” he said.
“We are witnessing a stabilisation of some building material costs with the easing of supply chain disruptions. Shipping timeframes and costs are now mostly back to pre-pandemic levels. There is some uncertainty around the outlook, given the softening underway across the domestic economy. We expect to see some cooling across sectors that are consumer driven, as households grapple with high cost of living pressures and higher interest rates.
“On the other-hand, public sector spending remains robust and there is a significant pipeline of major projects to be delivered around the country, which will keep markets buoyed. Private sector investment in data centres is also experiencing increased activity.”
The data found Brisbane has the highest labour cost at US$66.3 (A$99.14) per hour, thanks to a strong government infrastructure pipeline in preparation for the 2032 Olympics.
“It will be some time before high labour costs dissipate and the return of immigration eases shortages,” Mr Billingham said.
“With the housing slowdown, labour is shifting to major infrastructure and renewable projects as well as developments that are being planned for the Olympics in 2032.”
Sydney came in second, with labour costing US$65.3 (A$97.64) per hour, followed by Melbourne (US$64.3 (A$96.15)), Adelaide (US$60.6 (A$90.62)) and Perth ($57.9 (A$86.68)).
|
|
Ranking (/89 markets) |
Cost per m2 (US$) |
2022 inflation (%) |
2023 inflation (%) |
Labour / hour (US$) |
|
Sydney |
34 |
2,950 |
7.5 |
4.0 |
65.3 |
|
Perth |
48 |
2,633 |
8.0 |
3.0 |
57.9 |
|
Brisbane |
51 |
2,561 |
9.0 |
5.0 |
66.7 |
|
Melbourne |
52 |
2,540 |
6.5 |
4.0 |
64.3 |
|
Adelaide |
53 |
2,382 |
5.5 |
4.0 |
60.6 |
It comes as 88 per cent of organisations are experiencing a skills shortage, according to the latest Hays Salary Guide. In addition, 78 per cent of employers believe the skills shortage will impact the effective operation or growth plans of their organisation.
Hays said the most in demand roles in the property industry are:
- Property Managers (commercial/retail)
- Lease Administrators
- Development Managers
- Asset Managers
- Property/Investment Analysts