Costs of building driven up

THIN profit margins for building companies could push new home prices beyond the reach of Far Northern residents already battling to afford their first home.

Master Builders Queensland said builders were struggling to keep new homes affordable in the face of high costs for materials, labour and government taxes and levies.

Master Builders Queensland deputy chief executive Paul Bidwell said some builders were squeezing margins to razor-thin levels to keep their homes affordable.

“These practices are not sustainable. We need to find new ways to drive down, or at least contain, the cost of new construction,” Mr Bidwell said.

“If it continues to rise, we will begin to push Queenslanders out of home ownership. For a homebuyer, especially in the regions, a cost hike may be the difference between being able to secure a mortgage and not,” he said.

Material and labour costs were acting as a “critical constraint” on Far North construction businesses, according to the group’s industry survey report for March.

Far North builders described trading conditions as “weak” for residential projects in March, while conditions for non-residential projects had stabilised.

Survey respondents expected trading conditions to calm in coming months.

“Stable turnover, profitability and contract prices are expected to help trading conditions in both sectors to stabilise in the coming three months,” the report said.

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