Gaining some ‘pre-build’ clarity
There’s been a lot of talk in recent times about building new homes. Whether it’s in response to calls for increasing the supply of housing to help more people into the property market; concerns about the rising cost of new home construction; or simply weighing up your options on whether to buy new or established; home building is a topic on the tip of lots of people’s tongues.
With this in mind, I thought I might share some up-to-date numbers to provide some clarity for anyone trying to gain an understanding of what’s really happening.
Firstly, it’s important to keep in mind that while the rise in Australia’s construction costs have eased a little since their pandemic heights in December 2022 (when they hit over 17 percent), the figure in the first quarter of 2025 was 1.4 percent, so still rising. The good news is that the Victorian figure showed a slight drop in March, which is much better than places like W.A. where the rate of increase was still above 10 percent.
One of the driving factors in these increases is a shortage of qualified tradespeople. The Master Builders Association has estimated that we will need around 90,000 new workers to meet demand.
As a result, average construction times for a residential dwelling are around 10 months, a long way over the 6-7 months that was the average…and as the saying goes, “time is money”.
One potential solution is that pre-fabricated modular construction can cut building costs by 10 to 20 percent as well as cutting construction times by up to half over traditional onsite builds. The use of modular construction is currently growing, but not rapidly. This market was estimated to be worth around $3.7 billion in 2018, and has been estimated to double by 2030.
In this year’s Federal Budget, the national government allocated over $50 million to bolster the modular and prefabricated building sector. Of course, we have also seen growing awareness of options like the ‘tiny house’ movement, 3D printed buildings and others. So it will be interesting to see what comes from this.
In the meantime, perhaps the best advice for anyone considering building their next home is to thoroughly research their options, get experienced advice, and weigh up very carefully whether you really want to pay a premium in order to live in a brand new home as opposed to an established one.
Remember, if you want independent and objective advice on any property matter, whether you want to buy, sell, lease or build, you can give us a call at any time at Barry Plant Thomastown on 9466 3233.
We look forward to be of assistance.
Cheers,
Con Constantinou
Barry Plant Thomastown