Build costs rise
Over the past 15 years the cost of building a home in Australia increased from $179,500 to $313,800, according to the ABS.
That's an increase of 75 per cent.
In New South Wales the average cost to build a new house is now approximately $350,000, but the highest cost is in the ACT at $431,500.
Source: ABS
Of course, the composition of new dwellings has changed quite a bit over the past 15 years.
In New South Wales the average floor area of a new house shrunk by 12 per cent - largely due to geographical constraints in Sydney - and in Queensland the average home size fell by 3 per cent.
But in Victoria, where there is more space in the capital city, it increased significantly, by an average of 20 square metres.
Over the past 15 years the average cost of constructing a townhouse increased from $147,000 to above $250,000, with the average size of a townhome getting only marginally smaller over that time.
Units sizes shrink
The cost of building an apartment also increased by 53 per cent from $212,000 to $324,300.
That represents an expensive build cost per unit, since land and remediation costs are so very high these days, especially in the capital cities.
The big change in this construction cycle is that while apartments used to be more than 130 square metres on average, today they are well below 110 square metres.
So, in short, it costs more to get less.
Source: ABS
That's a decline in the average floor space of 18 per cent, and it's clear to see the drivers of this in the capital cities.
Broadly speaking there are two types of units: quality apartments built for people to live in, and those built cheaply for investors (often bought by non-residents, and often in multi-storey towers).
Labor plans to funnel more domestic investors into new apartments, but it's not clear how successful this will be, since the value at resale to the second user is likely to be lower given the two-tier nature of the proposed tax changes between new and established dwellings.
Broadly speaking there are two types of units: quality apartments built for people to live in, and those built cheaply for investors (often bought by non-residents, and often in multi-storey towers).
Labor plans to funnel more domestic investors into new apartments, but it's not clear how successful this will be, since the value at resale to the second user is likely to be lower given the two-tier nature of the proposed tax changes between new and established dwellings.
Land prices per square metre have increased dramatically in the capitals over the past 15 years too, of course.
I looked previously at nine of the main reasons that construction costs have soared here.
