Increased construction costs set to stablise as industry continues pandemic recovery

The destabilisation to the world’s economy attributed largely to the Covid-19 pandemic has impacted the building industry significantly, with interrupted supply chains, growing inflation, and a decrease in labour all contributing to an increase in construction costs nationwide.

With the brakes pulled on normal living for the best part of two years, exports, ports, and freighting were at a standstill, all the while projects were still in the works, which resulted in a bottleneck at the supply end. In the time since, it’s been a rush to re-establish these networks as doors gradually open.

Governments nationwide continued to commit to large-scale projects whilst production ground to a halt during the pandemic. An example, ten years ago Australia had just a singular transport infrastructure project in the works, whereas currently there are nine, which has a flow on effect for the entire construction industry below it.

The good news is that it’s widely understood that construction costs have peaked, and a return to normalcy should be on the horizon. Overseas shipping and freight costs are falling back to pre-pandemic levels, and international policies are easing, allowing the recommencement of major exporter’s ports.

Commercial project builds are underway in Hobart as the demand for space remains extremely strong, with local companies like; Lyden Builders, Direen Homes and The Young Group responsible for added infrastructure being erected in the Cambridge region. Furthermore, given the easing of ports and the return of the workforce, it’s anticipated that this will only increase, particularly as materials become increasingly available.

In consideration of all the elements ranging from inflation, fuel costs, increased freight prices, less margin for contractors, and large-scale projects in the midst of completion, the construction landscape will continue to rebound from the impact of the worldwide pandemic, as supply chains progressively return to a sense of normalcy.

The positive news is that the demand in the market remains strong. Builders within the region are accessing the materials required to undertake the projects, and progress is underway to supply Hobart and the wider surroundings with increased commercial real estate opportunities.