Building works data shows value of new home building works being completed at a record level, but it might not mean significantly more homes are being built.
Australians spent a record-breaking $100bn building new homes in the past financial year, more money than is produced by the economies of Sri Lanka, Uruguay or Slovenia.
And with experts noting the figure was in part driven by increasing building costs brought on by trade shortages, it’s likely the spike reflects Aussies spending more — not necessarily getting significantly more homes built.
And industry experts believe the cost spike will be coming off the back of a tradie shortage that is becoming an increasingly problematic headache for the Albanese government’s hopes to build the nation out of a housing crisis.
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Worse, the spike precedes the impacts caused by the Iranian conflict’s impacts on fuel costs — which are not expected to start appearing in the data until later this year.
Preliminary Australian Bureau of Statistics data shows that in the 2026 financial year Australians splashed $100.98bn on new home builds around the country.
A year ago the nation was spending just $90.78bn.
The uptick in June came alongside with a 2.1 per cent in the nation’s total value of construction work, including a 1.3 per cent increase in building work — with a 1.7 per cent rise in residential works.
The vast sum outpaces the Gross Domestic Product of nations including Sri Lanka, $98.96bn, South America’s Uruguay, $96.09bn, and Slovenia in Europe, $86.7bn, according to International Monetary Fund figures released this year.
A surging building spend across the nation is topping the $100bn margin.
It comes as a record was set in the June quarter for building work completed, with more than $26bn spent in current prices.
It was also a record financial year for construction work completed in chain volume terms, a metric the ABS uses to remove inflation and other factors for better long term comparisons.
Housing Industry Association senior economist Tom Devitt said while ABS data released a few weeks ago showed the cost of building would be rising as a result of the Iranian conflict, it had yet to impact the work completed data.
Instead, the record spend would reflect cost increased created by labour shortages.
Master Builders Australia chief economist Shane Garrett said builders were facing rising pressure as costs rose, and in many cases were being forced to pass them on to homebuyers.
“The ABS’s observation that higher labour and material costs are being passed on to consumers should serve as a reminder to government that when pressure is placed on builders and tradies, all Australians ultimately pay the price,” Mr Garrett said.
A shortage of tradies is believed to be a key reason why home building costs are rising.
Oxford Economics economist Michael Dyer said the $100bn figure was a “fun number to try and get your head around“.
However, Mr Dyer added that it was also being buoyed by a significant increase in luxury apartment builds in south east Queensland, and to a lesser extent similar builds in Sydney and Melbourne.
While the nation’s numbers were expected to continue rising in the near term, Mr Dyer said it was likely things would change after 2027 as the delayed onset of the nation’s interest rate hikes this year impacted the number of building completions.
“We will see that become more tangible next year,” he said.
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