Australia’s Construction Industry in 2025: Booming, Busting, and Everything in Between.

​The cost of construction and maintenance in Australia continues to rise, and strata communities across the country, including yours are feeling the effects. Recent insights from the Rawlinsons April 2025 Quarterly Update shed light on why project quotes may seem higher than expected, and why timelines for even routine repairs are stretching out.

​The Bigger Picture
Across the construction industry, productivity has dropped significantly—housing construction workers are now completing 53% fewer homes per hour than they were 30 years ago. At the same time, demand is rising sharply. To meet national housing targets, the industry needs more than 500,000 new workers over the next five years. However, skilled labour remains scarce.

Cost Escalation by City
Here are the projected building cost increases for 2025:

• Brisbane: +7%
• Sydney, Melbourne: +4.5% to +5.5%
• Canberra, Adelaide, Darwin: +5%
• Hobart: +4%

These increases reflect a combination of labour shortages, global supply chain issues, and volatility in energy and material costs. While some materials have stabilised, workforce constraints continue to push prices up.

Why Quotes Include 'Preliminaries'
Many residents have noticed line items like “Preliminary Costs” in project quotes. These refer to necessary but indirect construction expenses—site setup, insurance, temporary utilities, project supervision, and compliance measures. These costs often account for 10% to 25% of the overall job, especially in multi-storey or complex residential buildings.

How This Affects Your Building
Due to market conditions, all repair and upgrade quotes reflect these broader pressures. Factors like location, project duration, and site complexity can all increase costs. Strata committees and building management teams are working closely to prioritise works, seek competitive pricing, and ensure the building’s maintenance is both timely and cost-effective.
 
Key Takeaways:

• Construction productivity is down, demand is up, and skilled labour is in short supply.
• Costs are rising in every major city, with Brisbane experiencing the steepest increase.
• Preliminary costs are a normal, essential part of any building project budget.
• Every quote today reflects a challenging but industry-standard pricing environment.

​Understanding these broader trends helps explain why repairs and capital works often cost more and take longer than they did just a few years ago.

Your browser does not support viewing this document. Click here to download the document.