The cost of house building materials has remained unchanged in the September Quarter 2023 for the first time since before the pandemic, according to Housing Industry Association (HIA) senior economist Tom Devitt.

The Australian Bureau of Statistics (ABS) released its Producer Price Indexes for the September Quarter 2023 for a range of industries including mining, manufacturing, construction and services industries.

“The ABS Producer Price Index for house construction inputs saw a 0.0% change in the September 2023 quarter compared to the previous quarter,” he says.

“This sees the cost of house building materials just 4.4% higher over the year, compared to a 17.3% annual increase in 2021-22.”

Tom says the slowing in cost of house building inputs reflects a significant easing in the materials constraints that plagued the industry during the pandemic with some of the worst affected products during the pandemic now seeing outright declines in price.

“Last year, structural timber and reinforcing steel prices were both up by more than 60% on pre-pandemic levels. In the last year, they have declined by 8.8% and 5.3% respectively. Steel beams and sections, which were up by more than 50% a year ago, subsequently declined by 17.2%,” he says.

“Most of Australia’s pandemic inflationary pressures came from building materials and fuel. As these pressures ease, it will provide more certainty of future house building costs, as well as hasten the need for a cut to interest rates.”