Key Facts:
- Australian construction costs accelerated sharply in the June 2026 quarter, with Cotality’s Cordell Construction Cost Index recording a 1.0% national rise, up from just 0.2% in March, confirming the earlier slowdown was a temporary anomaly.
- ABS producer price data shows house construction output prices rose 2.0% in the June quarter alone – the largest quarterly increase since September 2022 – with NSW, Queensland, South Australia, and Western Australia all recording notable growth.
- Brisbane faces additional cost pressure through 2027 and 2028, as Olympics infrastructure competes directly with residential construction for labour and materials.
- Build Metric warns that builders tendering fixed-price contracts today with a 12-month delivery window must build structured escalation allowances into their estimates, as pricing on current rates for projects delivering into 2027 presents significant financial risk.
- Build Metric, which employs 45 full-time staff and claims a 98% accuracy rate, notes that escalation allowances calculated against the Cordell and RLB indices are standard practice in professional quantity surveying but are routinely absent from in-house builder estimates prepared under tender deadline pressure.
SOUTH MELBOURNE, Australia – 23 October 2026 – Build Metric, an Australian construction estimating and quantity surveying firm, says the June 2026 construction cost data has removed any doubt that the March quarter slowdown was a temporary condition, and that builders tendering work with a mid-2027 delivery window need to account for continued escalation in their estimates now, not at contract execution.
Cotality’s Cordell Construction Cost Index recorded a 1.0% national increase in construction costs over the June 2026 quarter, a sharp acceleration from the 0.2% rise recorded in March. Cotality’s Construction Cost Estimation Manager John Bennett confirmed that the March result was an anomaly and that cost escalation has returned to its more established pattern. Separately, ABS producer price data shows house construction output prices rose 2.0% in the June quarter alone, the largest quarterly rise since September 2022. NSW led the CCCI at 1.1% quarterly growth. Queensland, South Australia, and Western Australia each recorded 1.0% growth, with Brisbane facing the additional pressure of Olympics infrastructure competing directly with residential construction for the same labour and materials through 2027 and 2028.
The practical consequence for builders tendering today is straightforward. A fixed-price contract signed this month on a job with a 12-month delivery window will be executed against cost conditions that current rates do not reflect. Build Metric says the most consistent gap in builder-prepared estimates is the absence of a structured escalation allowance. A percentage added to materials and labour costs to account for quarterly index movement is standard practice in professionally prepared quantity surveying. It is routinely absent from in-house estimates, particularly on jobs priced quickly under tender deadline pressure.
“The September quarter Cordell figures will be out in late October and they will tell us whether the acceleration continued through the third quarter. Whatever that number shows, builders who are tendering now for 2027 delivery cannot price on today’s rates. The cost environment moving through 2026 has been clear: a brief pause in March, then a return to growth in June. A 12-month delivery window from now takes a project well into 2027, into Olympics construction pressure in Queensland, and into whatever the September data adds to that picture. An estimate that does not build that in is not a safe basis for a fixed-price contract,” said Luke Rose, owner of Build Metric.
Build Metric provides construction estimating to residential and commercial builders nationally, preparing quantity takeoffs, bills of quantities, cost estimates, and submission-ready tender documentation. Every estimate includes escalation allowances calculated against the Cordell and RLB indices for the relevant market. The company employs 45 full-time staff and holds a 98% accuracy rate across submitted estimates.
About us:
About Build Metric
Build Metric is an Australian construction estimating and quantity surveying firm based in South Melbourne, providing quantity takeoffs, bills of quantities, and tender documentation to residential and commercial builders nationally. Founded by Luke Rose, the company employs 45 full-time staff and operates across Australia and New Zealand.
