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Construction costs in Brisbane have surpassed those in Sydney, putting fresh pressure on a building sector already grappling with labour shortages and capacity limits.
A new report from surveying firm Turner & Townsend has ranked Brisbane as the most expensive city for building across Australia and New Zealand, with construction in the Queensland capital costing an average of $5,009 per square metre.
The firm’s latest Global Construction Market Intelligence report tracked building costs for 99 global markets during Q1 2025, and showed that Brisbane was the 36th most expensive city to build in the world.
Turner & Townsend regional real estate lead for ANZ, Julian Kerwood, said that an interplay of economic conditions drove Brisbane’s cost of construction upwards during the first quarter of 2025.
“Brisbane and wider Queensland benefitted from strong public investment, robust interstate migration, and the positive effects of significant construction expenditure ahead of the upcoming 2032 Olympics Games,” Kerwood said.
Kerwood said Brisbane’s top domestic ranking marked a shift from the status quo, with the city ranking seven places higher than the Sydney market, which has traditionally come in as the nation’s most expensive market for building.
He added that rising affordability and construction cost pressures in the larger Melbourne and Sydney markets have led to a shift in investment towards other states.
The firm observed a drop in demand for building in the two larger capital cities, with softened conditions in Melbourne resulting in the Victorian capital ranking the second-lowest for construction costs in Australia during Q1 2025.
Turner & Townsend’s data showed that investors have widely shifted their attention to smaller capital cities, with Perth rising to be the third most expensive market in Australia, due to surging demand and skilled labour shortages in the Western Australian capital.
The firm’s ANZ project director and head of construction economics, Tiffany Emmett, said it was “encouraging” to see growth and activity across Australia’s construction markets, but warned that the smaller capital cities could struggle to keep pace with the spike in demand.
Emmett said that investors should be particularly mindful of capacity constraints in Queensland and Western Australia due to the city’s construction markets being smaller than those in NSW and Victoria.
“The decline in some of the traditional hubs offers a cautionary tale. We must ensure that high demand – along with rising costs and stretched labour supply – doesn’t become its own worst enemy,” she said.
The Property Council’s executive director for Queensland, Jess Caire, said that Turner & Townsend’s findings helped to contextualise the shortcomings of Brisbane’s construction sector.
“Sadly, construction costs in Brisbane have been escalating for some time and the gap between costs and productivity has only widened,” Caire said.
“Not only are we the most expensive city in Australia to build in, but we are also the least productive state in the country – neither of these are titles we should be proud of.”
Turner & Townsend’s report also showed that construction cost inflation in Australia is forecast to remain at 4.2 per cent in 2025 and increase further to 4.6 per cent in 2026, which will further compound affordability challenges in the nation’s building sector.
With Brisbane’s average construction wage now sitting at $77 per hour, Caire said the cost escalations can best be minimised by incentivising more Queenslanders to enter the state’s building sector.
“The only way to offset these cost escalations is to increase productivity,” Caire said.
“We need more boots on the ground, we need to create safe and inclusive worksites where women and the next generation of trades want to build their careers.”
With recent data from the Australian Bureau of Statistics showing that Queensland’s build times have risen 58 per cent over the 10 years to 2024, Caire said an inclusive approach would be vital to filling labour shortages and boosting construction activity.
“This provides a perfect opportunity for a reset – to focus on boosting productivity while making a significant cultural shift that will attract more women and young people into the sector,” Caire said.
“Simply put, we cannot meet the demand without them,” she concluded.
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