Two ABS releases landed a day apart. Both say the same thing about what it now costs to build a house in Australia, from opposite ends of the transaction.
The average approval value for a new private house in Australia reached $529,790 in June 2026. That is the highest figure in the ten years of data the Australian Bureau of Statistics publishes alongside its monthly building approvals release.
Across the 2025 to 2026 financial year the average sat at $517,430, up 5.0 per cent on the $492,931 average recorded the year before.
That number landed on 30 July. The day before, the ABS reported in its June Consumer Price Index that new dwelling inflation had reached 5.8 per cent for the year to June, its highest level in almost three years. The Bureau attributed the increase to builders passing on higher material and labour costs.
Two separate series, released a day apart, saying the same thing from different directions.
What the approval value actually measures
The distinction matters before the number gets used for anything.
The average approval value is the construction value declared when a building approval is lodged. It is not a sale price and it does not include land. It is closer to a contract value than a market value, which is exactly why it is useful. It reflects what applicants expect the build itself to cost at the point the paperwork is filed.
New dwelling inflation in the CPI measures something different again. It tracks the price of newly built homes purchased by owner occupiers, and it feeds into the headline inflation figure the Reserve Bank responds to.
One is what builders declare going in. The other is what buyers pay coming out.
When both accelerate at a similar rate, the cost increase is real rather than a composition effect caused by a shift toward larger or higher specification homes. That is the case here, and it is the reason this week’s two releases are worth reading together rather than separately.
The scale of the shift
Six years ago the average new house approval was $334,661. That was June 2020, the month HomeBuilder was announced.
It is now $529,790.
Calculated from the ABS series, that is an increase of about 58 per cent in six years on a consistent measure.
The pace has slowed considerably from the peak. Year on year growth in the average approval value ran above 20 per cent in every month through the first half of 2022. It is now 5.1 per cent for the month of June and 5.0 per cent across the financial year just finished.
But slower growth on a much higher base is still a large dollar movement, and that is the part that gets missed. Five per cent of $529,790 is about $26,500 in a year. Five per cent of the 2020 figure was under $17,000. Small percentages on big numbers are still big numbers.
It also compounds into every cost that scales with contract value, from insurance and bank guarantees through to the working capital a job ties up before the first progress claim is paid.
How this compares with everything else
Context is what makes the 5.8 per cent figure land properly.
Headline CPI rose 3.8 per cent in the year to June, down from 4.0 per cent in the year to May. The trimmed mean, which strips out the most volatile movements and is the measure the Reserve Bank leans on, held steady at 3.6 per cent.
New dwellings ran two full percentage points above the headline rate, and more than two above underlying inflation.
Housing overall was the largest single contributor to annual inflation at 6.8 per cent, driven by new dwellings and by electricity, which the ABS reported was 22.4 per cent higher than a year earlier after government rebates that had been reducing household bills expired.
That electricity figure lands on a builder twice. Once in site power, workshop and office overheads. Again in the running cost conversation with clients, where the case for an efficient building envelope gets easier to make every time a power bill arrives.
Why this cycle is not 2024
The obvious reading is that costs are rising again. That reading is incomplete.
In the 2023 to 2024 financial year construction costs were also climbing, while approvals fell to 164,249, the weakest annual result in more than a decade. Costs were rising and demand was contracting at the same time. Builders were absorbing escalation on work that was getting harder to win in the first place.
Last financial year, both rose. Approvals reached 205,249 and the average approval value hit its highest point in the published series.
That combination means something different. The market is currently absorbing higher prices rather than walking away from them.
Which is not the same as builders making margin on them.
Passing on cost is not the same as recovering it
An average approval value of $529,790 describes the job as lodged. It says nothing about what happens between lodgement and practical completion.
The ABS explanation was that builders are passing on higher material and labour costs. That describes prices in new contracts. Work priced twelve or eighteen months ago on a fixed price basis is being delivered into today’s cost environment, and escalation after signing lands on the builder, not the client.
Commercial real estate fund manager MaxCap has forecast a further aggregate cost uplift of around 7 per cent for 2026, and noted lenders becoming more selective at the same time.
Two things move together in that environment. The cost of the build, and the cost of the money behind it.
On the ABS figures, an operator quoting today on 2025 cost assumptions is pricing roughly 5 per cent behind where the market has already moved. Across a build programme of nine to twelve months, another movement of a similar order sits between signing and handover.
The 5.8 per cent figure is the average movement in what buyers actually paid for a new home. It is an average. It is not a guarantee that any individual job recovered what it cost to build.
The Good Builder Take
The average new house approval crossing $529,790 is not a story about luxury homes. It is the ordinary declared cost of an ordinary new house, filed by the people building them.
The comparison that matters is not against last month. It is against the trimmed mean of 3.6 per cent. New home prices are rising about two percentage points faster than the general price level, and they have done so for long enough that it reads as a structural feature of this market rather than a shock passing through it.
Nothing in either release this week suggests that changes in the second half of 2026.
Frequently asked questions
The ABS recorded an average approval value of $529,790 for a new private house in June 2026, and $517,430 across the 2025 to 2026 financial year. The figure is the declared construction value at the point of approval and excludes the cost of land.
On the ABS approval value measure the average has risen from $334,661 in June 2020 to $529,790 in June 2026, an increase of about 58 per cent in six years. Growth has slowed from above 20 per cent a year in early 2022 to about 5 per cent now.
It measures the change in the price of newly built homes bought by owner occupiers. It rose 5.8 per cent in the twelve months to June 2026, the highest reading in almost three years. The ABS attributed the rise to builders passing on higher material and labour costs.
Yes. New dwelling inflation was 5.8 per cent for the year to June 2026, against headline CPI of 3.8 per cent and trimmed mean inflation of 3.6 per cent. New home prices are rising about two percentage points faster than the general price level.
The ABS attributed the increase largely to the expiry of government rebates that had been reducing household electricity bills.
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• Material Cost Movements in Australian Construction: What’s Stabilising, What Isn’t, and Why
This article is general information only. It does not take into account the particular circumstances of any business, contract or project, and it is not a substitute for professional guidance on pricing or contracting. Figures are drawn from the Australian Bureau of Statistics releases Building Approvals, Australia, June 2026, published 30 July 2026, and Consumer Price Index, Australia, June 2026, published 29 July 2026.
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Author: TGB Editorial
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