Construction Costs per Square Metre — Australia 2026

“What does construction cost per square metre?” is one of the most-searched questions in Australian property — and one of the most confusingly answered, because three authoritative sources publish three very different numbers, each measuring something different. A new house averages about $1,967 per square metre on ABS building activity data; Turner & Townsend’s city-wide averages run $4,133 to $5,009 per square metre; and a high-rise apartment sits somewhere in between. All three are correct — for what they measure.

This article compiles the current figures from each source, explains exactly what each one includes, and covers the cost inflation that sits underneath them all: Australian construction costs have risen roughly a third in five years, with house construction output prices up 40.8% between September 2020 and June 2024 alone. For anyone setting an insurance sum insured, budgeting a build, or testing a replacement cost, using the wrong measure is an expensive mistake.

Why the numbers differ — three measures, three answers

• ABS building activity data reports the builder-reported job value of approved and completed dwellings — including site preparation and GST for residential, but excluding land and landscaping. It is the closest thing to “what Australians actually paid to build”, averaged across every project from volume builds to custom homes.
• Quantity surveyor market surveys (Turner & Townsend and peers) report tender prices — what it costs to procure construction in each city’s market, usually averaged across many building types including offices, hospitals and hotels. These averages skew far above house-building costs.
• Cost indices (Cotality’s Cordell index, the ABS producer price index, RLB’s tender price index) measure movement, not level — how fast costs are rising.

The single most common error in sum-insured and feasibility work is applying a commercial-average $/m² to a house, or a five-year-old house rate to a 2026 rebuild. The tables below keep the measures separate.

What new dwellings actually cost — ABS data, FY 2024-25

Average builder-reported cost per new dwelling (ABS Building Activity, December quarter 2025 release):

Dividing by the ABS average floor areas gives an indicative cost per square metre (derived from ABS data — cost ÷ floor area, not an ABS-published rate):

Two readings worth pausing on: apartments cost more than double houses per square metre (structure, lifts, fire services and common areas concentrate cost into less floor area), and the NSW premium over WA for a house is about 51% per square metre. The ACT has the highest average new-house cost in the country at $645,052; the national average new house measures 241.5 m².

City-wide construction costs — Turner & Townsend, 2025

Turner & Townsend’s Global Construction Market Intelligence 2025 averages tender costs across all surveyed building types (commercial, health, hotels, residential) per city — which is why these figures sit far above house-building rates:

The 2026 edition of the same survey forecasts Brisbane cost escalation of 7.2% in 2026, driven by facility and transport projects in the run-up to the Brisbane 2032 Olympics together with significant health infrastructure investment — against global construction cost inflation of 4.5%.

By building type, the last publicly available breakdown (Turner & Townsend, Q1 2024 cost base, converted from published per-square-foot rates) put Sydney high-rise apartments around $4,100/m², medium-standard townhouses near $2,950/m², A-grade CBD offices around $5,500/m², warehouses near $1,850/m², and teaching hospitals above $7,300/m² — add roughly 4-5% per year of escalation to bring those to 2026 levels.

How fast costs are rising in 2026

The drivers have rotated. Through 2024-25 the story was labour: construction wage growth accelerated from 1.3% to 6.3% annually between early 2021 and mid-2024, and the ABS names bricklayers, carpenters and concreters as the trades commanding pricing power. In 2026 materials are re-accelerating — the RBA’s May statement points to fuel-linked products (PVC and HDPE pipe, concrete, steel, bricks) and expects those pressures to persist in the near term.

The five-year picture

• Cotality: national construction costs jumped 31.3% in the five years to March 2025 — against a pre-COVID decade average of 4.7% per year
• ABS: house construction output prices rose 40.8% between September 2020 and June 2024, peaking at +20.5% annual growth in September 2022 — the fastest on record
• RLB: construction activity hit a record $318 billion in 2025 (+3.8%), with residential up 7.3%

What this means for insurance — the underinsurance mechanism

Construction cost inflation is the engine of underinsurance: a sum insured set in 2020 and never re-tested now sits roughly a third below rebuild cost on the national indices — before demolition, escalation during rebuild, and code-upgrade costs are counted. The regulator’s numbers say this is not theoretical: APRA’s climate vulnerability assessment (March 2026) found about 1 in 7 Australian households currently lack adequate home insurance, projected to reach 1 in 4 by 2050, noting that income growth is not keeping pace with construction cost inflation. The Insurance Council names rising building costs — labour, materials and code compliance — among the main causes of underinsurance.

This is exactly the gap a replacement cost valuation closes: a current, professionally assessed rebuild figure including demolition, professional fees and escalation — the basis insurers actually pay claims on, as distinct from market value (see replacement cost vs market value). For strata schemes, only Victoria and Queensland mandate a periodic insurance valuation — everywhere else, nothing tests the sum insured unless the owners commission it.

Methodology

Dwelling cost and floor-area figures are from the ABS Building Activity release for the December quarter 2025 (published April 2026, FY 2024-25 averages); ABS values are builder-reported job values including site preparation and GST for residential work, excluding land — the per-square-metre rates shown are derived by dividing average cost by average floor area and are indicative, not ABS-published rates. City averages are from Turner & Townsend’s Global Construction Market Intelligence 2025 (all-typology tender-cost averages; AUD conversions per the report’s FX basis), with 2026 escalation from the 2026 edition. Typology rates are Turner & Townsend’s Q1 2024 survey, converted from published per-square-foot figures and flagged as requiring escalation. Index movements are from Cotality’s Cordell Construction Cost Index (December 2025 quarter), ABS Producer Price Indexes and CPI (March 2026), and RLB’s Q1 2026 tender price forecasts. Rawlinsons’ 2026 guides exist but publish no publicly citable rates and are not used. Every figure was verified against the named source on 15 July 2026.

When you need a professional cost assessment

• Setting or reviewing a sum insured — a building insurance valuation assesses the actual rebuild cost of your building including demolition, fees and escalation, rather than a generic per-square-metre rate
• Strata schemes — strata insurance valuations at replacement cost, mandatory on a 5-year cycle in VIC and QLD
• Specialised buildings with no market comparables — depreciated replacement cost valuations for schools, community facilities and infrastructure
• Financial reporting — asset valuations where construction cost movements feed directly into fair value under AASB 13
• Feasibility and development decisions — independent feasibility valuations testing whether current build costs still support the numbers

Frequently asked questions

How much does it cost to build a house per square metre in Australia?

On ABS data for FY 2024-25, the average new house cost about $1,967 per square metre nationally (average cost $474,939 over an average 241.5 m²) — ranging from roughly $1,585/m² in WA to $2,396/m² in NSW. That is a builder-reported average across all projects; architect-designed or custom builds in capital cities typically run well above it, and quantity surveyor tender rates for 2026 sit higher again after escalation.

Why do construction cost figures vary so much between sources?

Because they measure different things. ABS figures are actual job values for dwellings (excluding land); quantity surveyor city averages like Turner & Townsend’s blend all building types including hospitals and CBD offices, which pushes them to $4,000-$5,000/m²; and indices measure the pace of change rather than the level. Comparing a house build against a commercial city average is the most common mistake.

Which Australian city has the highest construction costs?

Brisbane — at $5,009/m² on Turner & Townsend’s 2025 all-typology average, it overtook Sydney ($4,866/m²) as Australia’s most expensive construction market, and the same survey forecasts Brisbane escalation of 7.2% in 2026, the fastest in the country, driven by the 2032 Olympics program and health infrastructure.

How much have construction costs risen in Australia?

About 31.3% nationally in the five years to March 2025 on Cotality’s Cordell index, with ABS house construction output prices up 40.8% between September 2020 and June 2024 — the peak was 20.5% annual growth in September 2022. Growth has since slowed sharply (+2.5% in 2025, the smallest rise since 2002) but remains positive, with 2026 tender forecasts of 4-6% across the capitals.

What does construction cost inflation mean for my building insurance?

If your sum insured hasn’t been re-tested since 2020, it is likely to sit around a third below current rebuild cost before demolition and escalation costs are added. APRA found about 1 in 7 Australian households lack adequate home insurance. A professional replacement cost valuation resets the sum insured to what rebuilding would actually cost today — including the costs generic calculators miss.

Disclaimer

This article is general information about Australian construction costs, not construction, insurance or financial advice. Costs vary significantly with location, site conditions, specification and market timing — figures here are averages attributed to their sources and reporting periods. For a professional replacement cost assessment, request a quote from Landmark Valuations.

Sources:

• ABS — Building Activity, Australia (December quarter 2025), Producer Price Indexes (March 2026), CPI (March 2026), Insights into building construction prices
• Turner & Townsend — Global Construction Market Intelligence 2025 (ANZ chapter) and 2026 edition
• Cotality — Cordell Construction Cost Index, December 2025 quarter
• RLB — Australia Market Intelligence Update Q1 2026
• RBA — Statement on Monetary Policy, May 2026 (Outlook)
• APRA — Mind the Gap: An Insurance Climate Vulnerability Assessment (March 2026)
• Insurance Council of Australia — The risk of underinsurance

Last verified: 15 July 2026. Cost indices update quarterly and the ABS building activity series twice-yearly — this article is reviewed against each release cycle. Spot an outdated figure? Contact info@landmark-valuations.com.au.

See also

• Replacement Cost vs Market Value for Insurance — the two numbers these costs feed into
• Strata Insurance Valuation Requirements by State — who must re-test the sum insured, and when
• Council Asset Revaluation Requirements by State — construction costs drive public-sector fair values too
• Australian House Price History 1980–2026 — what the land under the building did over the same decades
• Property Valuation Cost by State — Australia 2025-26 — what the valuation itself costs
• Australian Property Valuation Statistics 2026 — the market-wide data hub