Residential construction costs are increasing at one of the slowest rates ever recorded, CoreLogic’s Cordell Construction Cost Index has revealed.
The Index monitors expenses for constructing a standard new home. The most recent data shows a mere 0.3% increase in the March 2025 quarter and only 0.9% growth over the year ending March.
Costs grew by just 0.3% in the first quarter of 2025—half the 0.6% increase seen in the previous quarter (Q4 2024)—and remain substantially below the long-term average quarterly growth of 1%.
The 0.9% annual cost increase through March contrasts sharply with the peak annual growth rate of 10.4% recorded in 2022.
The Index also showed typical price fluctuations in Q1, with roof flashings and sheet metal climbing 3-4%, structural steel edging up 1%, kitchen cabinetry dropping 2%, and PVC plumbing pipes/fittings falling 3%.
CoreLogic chief property economist Kelvin Davidson stated that after years of disruption, the residential construction industry is beginning to revert to more typical patterns.
“The sharp drop-off in new dwelling consents and eventual building work over the past 2-3 years has helped take the heat out of costs… with overall consent volumes down around one third below their peak,” he said.
“Some builders now have spare capacity, which is helping cap further price rises.”