Real Estate
5 September, 2025
House prices beat building costs
BRISBANE’S housing market has reached a turning point, with house prices now rising faster than construction costs – a crucial shift that could spur new home building.
Ray White Group Chief Economist Nerida Conisbee said the change marked the first time in years that buying new was beginning to make more economic sense in Brisbane.
“Brisbane follows the same trend as Adelaide, with house prices rising 58 per cent against construction costs of 40 per cent,” Ms Conisbee said.
The trend mirrors results in Perth and Adelaide, where house price growth has also outstripped cost inflation, signalling renewed viability for new housing projects.
It’s a sharp contrast to Sydney, Melbourne and Canberra, where construction costs still far exceed modest house price gains, leaving new builds financially challenging.
Nationally, the gap between building and buying has narrowed dramatically.
Over the four years to 2025, construction costs rose 35 per cent while house prices lifted 32 per cent – a difference of just 2.3 percentage points compared to a 16-point gap in late 2023.
“Despite the narrowing gap, it remains cheaper to buy an established home than build new in most markets,” Ms Conisbee said.
“However, the momentum is clearly shifting.
