Brisbane has overtaken Sydney as Australia’s priciest city to build in, as a new Altus Group report warns that surging copper prices and capacity strains are inflating the risk of a construction “market bubble,” The Courier Mail reported.
Altus’ latest quarterly outlook shows more projects being approved and started since COVID, but a growing backlog of work that never reaches completion. The firm points to “growing evidence that some approvals are being pursued to lift land values, rather than to progress delivery – a key sign of a market bubble”.
With almost half of Australians doubting they’ll ever own a home, each construction cost spike is deepening the nation’s housing crisis. For decades, land, not building, drove housing costs, but construction prices are now surging too, leaving affordability squeezed from both sides of the equation.
Over the past 12 months, there have been 1,894 construction insolvencies, the most of any sector, as builders struggle to absorb escalating material and financing costs. To achieve the federal goal of 1.2 million new homes in five years, completions must average 60,000 dwellings a quarter, yet current output is tracking well below that level.
Copper is the standout pressure point. Altus Group’s head of development advisory APAC, Niall McSweeney (pictured), said global demand and on-site delivery risks mean larger projects are now seeing cost escalation “frequently measured in six figures”. Benchmark prices have climbed beyond US$13,000 a tonne, fuelled by electrification, data centres, and renewable energy, with S&P Global tipping demand to leap from 28 million tonnes in 2024 to 42 million tonnes by 2040.
Because copper is embedded in late-stage electrical, plumbing, and mechanical trades, developers have little room to redesign or substitute once work is underway, leaving budgets exposed to sharp, last‑minute price shocks.
Altus also warns that “public investment is absorbing a growing share of national construction capacity, competing directly with private-sector projects for the same labour and services trades”.
The report now puts Brisbane’s cost escalation at 7.75% through 2027, nearly double Sydney’s 4.25% and well ahead of Melbourne’s 3.75%, as Olympic venues, major transmission and renewable projects, and accelerated housing all vie for the same subcontractors.
“Multiple megaprojects are converging in the same narrow window. The key challenge is timing,” McSweeney said, with Altus expecting escalation to remain well above pre‑2021 norms for several years.
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