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Low interest rates coupled with astronomical housing prices have led to an increase in new home construction and renovations at national scale.

The construction boom happened to coincide with major disruptions to supply chains and shortages of materials and labor, resulting in the highest construction cost growth rates they’ve ever reached. in 16 years.

CoreLogic research director Tim Lawless said costs have increased significantly over the past year.

A construction boom coincided with a spike in construction costs due to a shortage of materials and labor. (9News)

“People’s budgets must be a little bigger than they thought a year or even six months ago,” he said.

Cordell’s data shows cost increases are still driven primarily by wood, primarily structural lumber.

Other segments of the market also remain volatile, with increasing pressure on metal costs.

The cost of wood rose by 39.7%, steel by 43.1%, copper pipes and fittings by 24.1%.

Building materials are in short supply as the country continues its construction and renovation boom.
Building materials are in short supply as the country continues its construction and renovation boom. (9News)

Metal roofing and guttering increased by 14.8%, aluminum windows and doors all increased by 15% and insulation increased by 10.6%.

Even the mirrors have increased by 10%.

But it’s not just hardware costs that are of concern; Australia is currently facing the worst skills shortage on record.

9News can reveal that the availability of commerce workers fell another 20% in the last quarter.

The cost of materials has increased, pushing the construction boom to blow budgets.
The cost of materials has increased, pushing the construction boom to blow budgets. (9News)

Lack of labor lengthens the time needed to complete construction and renovations.

While some of the material shortages may improve this year as supply chains catch up with record demand, the skills shortage is expected to continue well into next year.

“Returning overseas migration will drive strong demand for new housing, so this boom, this super construction cycle, is going to last through 2023,” said Tim Reardon, chief economist at the Housing Industry Association.