Home building costs are finally starting to ease, with new figures showing the pace of price growth has slowed to a two-year low.

The latest Cordell Construction Cost Index shows the cost of building a new home only increased by 0.9% in the March quarter – much less than the 1.9% increase in the previous quarter.

Queensland had the highest quarterly cost growth of 1.2%, followed by South Australia and Western Australia with growth of 0.9% each the lowest quarterly gain since March 2021.

CoreLogic construction cost estimation manager, John Bennett, says timber prices have softened although the cost of bulk materials increased in the past quarter as a result of rising fuel costs.

“There is still instability in the market, particularly with structural timbers and pricing for metal products is increasingly volatile across various products,” he says.

It’s believed weaker demand, due to project cancellations or delays, has resulted in a softening of price growth.