“Home building materials have continued to experience only modest cost increases, up by 1.6 per cent in the 2024/25 financial year,” stated HIA Senior Economist, Maurice Tapang.

The ABS today released its Producer Price Index (PPI) series for the June quarter 2025, which covers input costs for a range of industries including mining, manufacturing and housing construction.

“Prices of home building materials has grown at a slower rate than other goods and services, as measured by the Consumer Price Index (CPI),” added Mr Tapang.

“Materials prices have been growing at an annual rate below two per cent for over two years now.

“The cost of building materials rose rapidly due to supply chain disruptions and have eased as markets have been allowed to operate. 

“Despite the slowing in the cost of building materials, the cost of building a new home continues to increase. 

“The average cost of a new detached house approved in Australia has increased by 4.8 per cent in 2024/25 to $492,410.

“The increase reported by the ABS PPI data does not reflect the additional costs added to new home construction through additional regulatory imposts.

“The relatively more rapid rise in the cost of the average value of a house approval reflects not just changes in consumer preferences, but also due to the additional costs due to the introduction of the National Construction Code 2022 and additional taxes. 

“If Australia were to address the housing affordability challenge, governments need to look at reducing the regulatory burdens they impose on new homes,” concluded Mr Tapang.

By material type, the largest price increases in 2024/25 were seen in copper pipes and fittings, up by 13.9 per cent. This was followed by electrical cable and conduit (+8.3 per cent), fibrous cement products (+7.5 per cent), readymixed concrete (+5.7 per cent) and timber doors (+5.2 per cent).