ABS data reveals widespread increases in new home building expenses
The cost of constructing new detached houses is increasing at a rate above inflation in most Australian states, according to recent analysis of Australian Bureau of Statistics (ABS) figures by OpenLot.com.au.
Tasmania experienced the largest annual jump, with average construction expenses rising 9.2% over the past financial year. South Australia recorded an 8.2% increase, while Western Australia and the Northern Territory saw rises of 7.2% and 5.5% respectively. The Australian Capital Territory was the only jurisdiction to report a decrease, with average costs falling by 0.5%.
The analysis examined average construction costs for detached houses in the 2024 and 2025 financial years, using the latest full-year building approvals data from the ABS.
“Building a new home is becoming more expensive nearly everywhere,” said Qi Chen, chief executive of OpenLot.com.au. He noted that many purchasers in new developments are responding by choosing smaller dwellings or more affordable finishes to manage higher costs.
Despite the increased costs, sales of newly constructed homes rose by 25.9% in September, according to the Housing Industry Association.
Victoria and New South Wales remain the most expensive states for new house construction, with average costs of $589,080 and $558,326 per dwelling respectively. Chen pointed out that the larger scale of projects in these states has helped to moderate some of the cost pressures.
In contrast, Tasmania and the Northern Territory face higher transport and logistics expenses, contributing to steeper increases in construction costs.
“Persistent construction inflation requires co-ordinated action from builders, suppliers and policymakers to improve building practices and approval processes,” said Chen. “Greater transparency in the new-home market could also help buyers better understand costs and options.”
The research focused solely on construction costs for detached houses and did not account for builder margins, which vary by contract. The figures also exclude apartments and other multi-unit dwellings and reflect only the cost to build, not land or final sale prices.
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