The cost of construction is on a historic high in Australia. Over the past year, the cost of building has increased by 4% which is not just higher than the historic average, but is also higher than the growth over the past five years. The housing market is incredibly buoyant right now, and it has affected the cost of construction throughout the country.
The buoyancy of the housing market might have increased the profit margins of the construction companies in Australia, and increased the cost of all equipment too. This situation has not done anything to increase the wages or the benefits of the people involved in construction work. The construction workers are not responsible for this increase in construction cost, and they are certainly not reaping the benefits of the same.
Houses and office spaces have become more expensive to buy, but the rents have not gone up in a proportionate manner. In fact, the cost of renting is at an all- time low since after the 2000s. While this might not be good news for people looking to buy houses now, or for people trying to rent their home out, it is good news for people who already have a mortgage, for the RBA has reduced mortgage to a mere 2.5%.