While underlying inflation has eased back to +2.7%, national construction costs continue to rise. The latest (Rawlinsons) forecast predicts +4.5% construction cost growth for Sydney across 2025.
This persistent gap is another factor that will keep putting upward pressure on established housing and commercial property values in the medium term.
Replacement cost matters – there will always be a loose nexus between the value of established buildings and the cost of delivering new.
