New home owner Julie Lock is one of many local residents who have felt the effect of rising costs in the building industry.
New home owner Julie Lock is one of many local residents who have felt the effect of rising costs in the building industry.

Building costs blowout

By ALLAN McNEIL allanm@gladstoneobserver.com.au and KELLI DOWNEY kelli@gladstoneobserver.com.au

JULIE Lock moved to Gladstone expecting building costs to be as cheap as chips.

Instead she spent about $50,000 more than she had planned. And Mrs Lock is not alone, with the cost of building a new home rising at least $10,000 last year.

Originally from Brisbane, Mrs Lock said the cost of building her four-bedroom home had surprised her.

"It was cheaper (to build) here than in Brisbane, but it was still a lot more expensive than I had expected,'' she said.

Mrs Lock said she had been told by her sister who lives in Gladstone, that she would be able to build or buy a house for about $300,000. Instead, the house she and her husband just finished building cost nearly $500,000 including the land.

A housing cost index undertaken by The Queensland Master Builders Association has revealed an increase of up to 10 per cent in costs associated with building a new home.

According to results of the 2004 index, the average cost of building a base model lowset house rose by $2000-$2500 per quarter.

An increase spanning statewide, Gladstone region included, which will continue to grow throughout the year.

Yet despite this, local residents have not been deterred by the increases, preferring to own "a brand new baby'' than buy into an inflated real estate market.

QMBA director of housing Peter Osterhage said a skills shortage and supply and demand were the driving forces behind the increased costs.

Mr Osterhage said labour costs had gone up, so too the cost of materials such as concrete and steel.

However, he said it was mainly the increase in subcontractor rates which made an impact.

"The prognosis for the future is a bit unknown,'' Mr Osterhage said.

"But the costs will never decrease, only go up from here. "The demand is still here in Queensland and this will remain for at least the next couple of years, particularly with the ongoing population growth.''

Despite the increased prices, Mr Osterhage said people were not being put off from building a new home.

He said the only thing most likely to put a dampener in the building activity would be the availability of land.

"What people need to realise is that the building and property market should not be confused,'' he said.

"When you hear reports of prices dropping, that is solely for real estate.

"You are not going to see a drop in building prices because that is exactly what it costs.



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