And it’s only going to get pricier in the lead-up to the 2032 Olympics
Brisbane Tops the Building Cost Charts
Brisbane has officially overtaken Sydney and Melbourne to become the most expensive city in Australia to build in, according to Turner & Townsend’s latest Global Construction Market Intelligence Report. At $5009 per square metre, it’s now the costliest location for construction — and it’s expected to keep climbing.
Compare that with Sydney’s $4866 per square metre, and Melbourne’s $4242, and you get a sense of how quickly the Sunshine State’s capital is heating up. This isn’t just inflation. It’s the collision of multiple forces — infrastructure projects, skill shortages, and Olympic deadlines — all bearing down on an already stretched building sector.
Why Is Brisbane So Expensive?
The sharp rise in construction costs is being driven by a perfect storm:
- Massive infrastructure investments like Cross River Rail, the Brisbane Metro, and the Bruce Highway upgrades are already absorbing skilled labour.
- Preparations for the 2032 Olympics are looming large, with over $7 billion in projects anticipated.
- Labour shortages and stagnant productivity are making it harder (and more expensive) to get the job done.
- Enterprise Bargaining Agreements (EBAs) are locking in wage increases of around 5% annually across major markets.
“Elevated cost growth is the new normal,” says Tiffany Emmett of Turner & Townsend. “Wages are rising, productivity is flat, and risk is high. That’s keeping inflation elevated even as some global markets cool.”
Pressure Mounting Across the States
Queensland and Western Australia are leading the pack when it comes to construction cost growth. Perth now ranks as the third most expensive city to build in, at $4497 per square metre. Adelaide remains the most affordable at $4133.
Both Queensland and WA are being praised for actively collaborating with industry to manage cost pressures — but the scale of upcoming projects means demand is still expected to outstrip supply.
In fact, Queensland alone is forecast to need an additional 18,500 building workers by 2029 just to meet its share of the national 1.2 million new homes target.
Impact on Apartment Viability
For developers, the situation is becoming untenable. Consolidated Properties CEO Don O’Rorke says you’d need to sell a 100m² apartment for over $2 million just to make it stack up.
“The only apartments getting built now are on super prime sites,” he says. “The average buyer is being priced out. That’s why we’re seeing a massive shift toward luxury, downsizer stock — and not much else.”
O’Rorke also points to productivity drag as a major concern, noting frequent delays from weather and RDOs under the current EBAs. “There’s a real disconnect between demand and capacity.”
HIA: Apartment Sector Under Siege
Tim Reardon, Chief Economist at the Housing Industry Association, is even more blunt: “It’s prohibitively expensive to build new apartments in Australia right now.”
Increased taxes, evolving building codes, and higher materials costs are all contributing. “Financiers are pulling back, especially offshore lenders and super funds, because the numbers just don’t work.”
Reardon also flagged that skilled labour is being drawn away from housing and into infrastructure and mining, further eroding residential capacity.
“Expect labour costs to rise at double the national wage growth over the next few years,” he warned. “And unless we see access to overseas labour increase, both skilled and unskilled, it’s going to stay tight.”
The Olympics Effect
Queensland’s Olympic build is both a blessing and a challenge. It’s injecting billions into the economy and creating jobs — but it’s also distorting the construction pipeline.
With limited workforce capacity, high demand from multiple sectors, and long lead times for materials, the industry is entering a bottleneck. And once residential construction rebounds (as is expected when interest rates fall), cost pressure will only intensify.
Turner & Townsend forecasts a further 4.2% rise in construction prices in 2025, and 4.6% in 2026.
What Can Builders and Suppliers Do?
This isn’t a blip — it’s a structural shift. For those in the industry, it’s critical to adapt:
- Plan for longer lead times and higher labour costs — this is the new baseline.
- Partner with proactive suppliers and trades who can help mitigate delays and deliver efficiently.
- Consider prefabrication and modular construction, especially for repeatable typologies.
- Focus on productivity, not just procurement — efficiency at site level matters more than ever.
- Engage early with financiers and planners to build realistic feasibility models.
Final Word from The Good Builder
The days of predictable cost modelling are gone. For builders, developers and suppliers, success in this market will come down to coordination, foresight, and execution.
Brisbane is booming — but that boom comes with baggage.
Are you seeing cost pressures affect your projects? What are you doing differently to manage supply, timelines or labour? We’d love to hear your story.
👉 Reach out to us at [email protected] or via LinkedIn
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