You've been saving for your first home, looking at blocks and trying to work out what you can afford. Then a headline says construction costs are settling. Does that mean building your home is about to get cheaper?
The latest figures don't show falling building costs. They show costs increasing again, at a pace below the unusually high rates experienced after the pandemic.
At Teach Me About Property, we help you turn property information into practical preparation. Start by separating three things: what the industry data measures, what your builder has quoted and what your household can afford.
No. Cotality's October release reports construction costs rose 1.0% nationally during the September 2026 quarter, compared with a 0.2% increase at the beginning of the year.
Over the 12 months to September, costs increased 3.2%. That annual growth rate was higher than the previous quarter's 2.8%.
So why describe the sector as settling? Cotality says the pace is closer to a typical pricing cycle and remains below the rates commonly experienced after the pandemic. The latest quarterly increase still represents renewed momentum, not another slowdown.
Think of a shopping basket. If the same items cost more than last year, the basket hasn't become cheaper just because earlier increases were larger. Our explanation of slower rental growth makes a similar distinction.
The Cordell Construction Cost Index, or CCCI, tracks changes in construction costs, including building products, services and labour.
An index is a way of following movement over time. It helps answer, “Are these costs rising, and how quickly?” It doesn't provide a personalised quote for your block, plans or finishes.
It also isn't a measure of what an established home will sell for. Construction costs and existing property prices can move differently. A softer housing market doesn't automatically make a new build cheaper.
A percentage becomes easier to understand when you apply it to an example. Imagine a hypothetical construction amount of $400,000, excluding land and other expenses.
These are separate illustrations of the quarterly and annual percentages. Don't add them together. The annual figure already covers a 12-month period that includes the latest quarter.
Neither calculation predicts your next quote or changes an existing contract. The point is to understand the size of a movement, then check your actual costs. As our article on borrowing capacity explains, start with your own financial position.
Your total project budget needs to include everything required to buy the land, complete the home and carry the costs along the way. What sits inside the building quote depends on the offer and contract.
Check land, site preparation, approvals, connections, finance and legal costs. Then check finishing items such as the driveway, fencing, landscaping and window coverings. Mark each item as included, separately quoted or still unknown.
Our article on faster prefab construction makes a useful point: faster construction doesn't automatically mean a cheaper total home.
Write down one complete project total before comparing options. A lower advertised building price is hard to assess when the exclusions are still blank. If you compare an established home, use comparable sales to assess its asking price too.
Your state's result gives broad context, not the price of your particular build. Cotality reported these September 2026 quarterly increases:
A smaller increase doesn't establish a lower starting price. Victoria's 0.9% result doesn't prove building there is cheaper than in Western Australia.
Cotality also reported increases in plastics and smaller rises in plasterboard. Its commentary warned of continuing pressure on builders' margins, meaning the money left after their costs. Steadier industry figures don't remove individual builder and developer risks.
Use five checks to turn the headline into questions about your own project. Get answers in writing and obtain independent advice before committing.
Ask the builder: “Until what date does this price apply, and what conditions need to be met?” If your plans or timing change, ask whether the quote needs updating. Don't treat an old estimate as a confirmed current price.
Ask: “Can you show me every inclusion, exclusion and allowance?” An allowance is money set aside for an item or work whose final cost may differ. Have the builder explain unfamiliar terms and the effect on your total budget.
Ask: “What site investigations have been completed, and which site costs remain uncertain?” Clarify how ground conditions, slope, drainage and connections have been allowed for. Identify unresolved items before you decide whether the project fits your budget.
Ask your solicitor or appropriately qualified adviser to explain price changes, variations, payment stages, delays and termination rights under the proposed contract. Rules differ by jurisdiction. A market index doesn't tell you what your builder can legally charge.
Build a contingency, meaning money reserved for surprises, around the project's specific uncertainties. Review it with your builder and finance adviser rather than choosing a percentage from a headline. Include what a delay would mean for rent and other household expenses.
This report cannot tell you the right time to build. It doesn't promise falling costs, and it doesn't prove that signing today will save you money.
Cotality's John Bennett warned that the timing and size of future increases remain uncertain. The housing supply picture adds context, but cannot establish whether one project is suitable for you.
If the complete budget stretches your household, pause and review it. If the figures work, keep checking the builder, contract, finance and property rather than treating the national data as approval to proceed.
Teach Me About Property provides first-home buyer education to help you understand those decisions. Your next step: put the full project budget on one page and identify every amount you still need confirmed.
No. Steadier growth doesn't mean falling costs. Your quote depends on the project, its inclusions and the builder's pricing. Teach Me About Property helps you interpret market information, but a national index cannot replace a current written quote.
Don't assume it does. Have an independent adviser explain the proposed contract's exclusions, allowances and permitted changes. Teach Me About Property's education supports your preparation; legal advice needs to address your actual contract and the rules applying where you build.
Yes. Compare the full costs, condition, timing and suitability of both options, rather than an advertised build price against a completed home's asking price. Teach Me About Property helps first-home buyers explore their options, with household affordability guiding the decision.
General educational information only, not personal financial, credit, investment or legal advice. Market figures are from Cotality's release dated 21 October 2026. Contract terms and building requirements vary. Seek appropriate independent advice for your circumstances.