Australia experienced a CCCI Quarterly growth of 0.8% for Q4 and an Annual Growth of 2.9%.

Australia experienced a CCCI Quarterly growth of 0.8% for Q4 and an Annual Growth of 2.9%.

CoreLogic’s Cordell Construction Cost Index (CCCI), which measures the expense of constructing a new residential structure, experienced a growth rate of 0.8% during the three-month period to December 2023. This is 20 basis points lower than the average rate of 1% observed before the Covid pandemic over the course of a decade.

In 2023, annual growth was 2.9%, which was lower than the average of 4.0% for the pre-Covid decade. The annual increase in the national CCCI is at its least since the year to March 2007 (2.7%) and below the pre-COVID decade average (4.0%).Kaytlin Ezzy, an economist at CoreLogic, remarked that these most recent figures indicate re-acceleration is more of a trend reversal than a new surge in construction costs. Construction cost growth has returned to normalcy subsequent to reaching its peak of 11.9% in the twelve months leading up to December 2022, albeit at a more elevated magnitude.

While the recent increase in CCCI is 26.6% higher than it was at the start of the pandemic, it falls short of the nationwide house value surge observed in CoreLogic's Home Value Index, which rose 36.5% during the same time frame. Ezzy noted that the pace of CCCI growth this year could be shaped by a few factors, such as the national dwelling approval levels. “Although national dwelling approvals have risen from a recent low of 12,185 in January, the latest data from the ABS showed that dwelling approvals remained -15.8% below the decade average in November at 14,500,” she said.

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