Australian Property Investor
Material prices across Australia continue to climb, even as global material markets soften under weaker demand.
Is this an anomaly – or a symptom of something deeper? For long-time observers of Australia’s construction sector, the answer is clear: it’s the latter.
The Productivity Commission’s 2025 report shows housing productivity has fallen by more than 53 per cent over the past three decades – it now takes twice the effort, resources and cost to deliver the same level of housing output as 30 years ago.
This is alarming for a nation gripped by a housing crisis.
We are witnessing the cost of this productivity collapse in real time, as housing projects consume more labour and time per unit of output, leading to inflated costs and extended project timelines.
This has ripple effects across the construction supply chain, as material suppliers are forced to adapt their operations to inconsistent demand – inevitably pushing prices of materials higher.
Compounding the problem are persistent skills shortages and a rise in construction insolvencies, which introduce greater unpredictability into the construction sector.
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