The average cost of a new home increased by 19.6% in the past year as a result of surging labour and material costs.
Australian Bureau of Statistics figures show year-on-year inflation in new house values hit the highest rate in more than 30 years.
The rising costs have resulted in a number of building firms going into liquidation or reporting losses.
The Simonds Group, one of Australia’s largest home builders, reported a loss for the six months to December.
Total new dwelling approvals dropped 28% but many builders have full workbooks trying to deliver houses they signed up under fixed price contracts under the Federal Government’s HomeBuilder scheme.
BIS Oxford Economics principal economist Tim Hibbert says the backlog would take some time to clear and would likely continue well into 2023.
“The cost growth profile is going to be strong into 2022 – well into double digits nationally for houses and that’s on top of a pretty frothy 2021,” he says.
