Brisbane construction costs set to rise by 30% over the next five years as Olympic projects accelerate according to recent findings from global engineers Arcadis.
The company’s Half-Year Construction Market View revealed major obstacles hindering the fast-expanding project pipeline, with construction cost growth in Brisbane continuing to exceed long-term averages. While the report noted a slowdown in building costs in Sydney and Melbourne, Brisbane faces continued pipeline driven pressures.
The report found that the 2024 Brisbane buildings cost escalation came in at 5.2 per cent, slightly under the 6 per cent forecast, a result of the slower than expected start to the Olympic infrastructure program. It said the Olympic program, along with capital works in health, will be a significant driver of demand. “Consequently, the next several years are expected to see renewed upward pressure, with Arcadis projecting 5 per cent escalation for 2025 and a total buildings inflation of 30.5 per cent by 2029,” the report said.
Worryingly, “Brisbane’s construction market is experiencing acute labour shortages, with a shortfall of more than 41,000 workers reported in early 2025 the report found. The construction industry locally is facing widespread delays and deferrals on major projects. Matthew Mackey, executive director, Cost & Commercial Management at Arcadis said it was promising to have a line of sight for the Brisbane Olympics, with a city-shaping narrative for projects helping boost confidence among developers and contractors. “However, we need to act quickly to ensure projects can be completed in time. Government has put in place the legislation to pave the way for planning, but it remains unclear how the work is going to go to market,” he said.
Arcadis said that labour shortages remained a critical bottleneck, with the sector needing an estimated 90,000 to 130,000 additional workers nationwide. This deficit is pushing up wages and intensifying competition for skilled talent, while insolvencies continue to reduce the industry’s overall capacity. Mr Mackey said a crucial turning point has arrived with the recent federal election, which returned Labor with a mandate to address housing affordability and availability.
What does this mean for the QLD strata sector, firstly it highlights the need to regularly review Sinking Fund Forecast reports and obtain updated insurance valuations, well in advance of the legislated timeframes. Schemes may risk raising insufficient funds for major projects even while following the figures from if forecasted projections are not updated to reflect current market costs, similarly while insurers annually index sums insured, obtaining regular valuations, at least every 2 years helps safeguard against under insurance.
In the short-term impacts will also be felt in terms of costs escalation for projects, the quote that was obtained 6 months ago will the Committee dutifully got all their ducks in a row now needs to be revisited and is likely to have increased. If the Committee didn’t go back to the contractor to confirm the pricing remained current and raised special levies based on the original figure may now face a shortfall in funds and need to hold another meeting and raise additional levies. The demand for skilled trades also hinders contractor availability and sees project commencement times and completion timelines blow out.
In light of the current market trends, Bodies Corporate need to adopt a proactive and strategic approach to planning, funding, and project management to ensure works are completed on time and within budget.