Advisory firm WT’s latest ‘Australian Construction Market Conditions Report’ has highlighted that Australia’s construction market is set for another surge in cost escalation from 2027, as major developments ahead of the Brisbane 2032 Olympics combine with renewed upswings in Sydney and Melbourne.
The report extends WT’s national cost outlook to 2028 and signals that while short-term pressures are easing slightly, the next escalation cycle is already taking shape. Nationally, WT forecasts average escalation of 5.2% for building – the lowest level in six years – and 5.0% for infrastructure in 2026. However, costs are projected to rise to 6.4% and 5.8% respectively by 2028.
Brisbane is expected to lead, with building costs rising by 10%. In Sydney and Melbourne, building costs are forecast to increase by an average of 4.75% to 5% per year, as resources and labour shift north while local activity rebounds.
“Queensland’s infrastructure and building boom will have national consequences.
“As Olympics-related and housing projects ramp up, we expect competition for labour, materials and capability to intensify – particularly in 2027 and 2028.
“The sector has little buffer to absorb another wave of simultaneous demand.”
Damon Roast, Construction Economist, WT
While infrastructure escalation is expected to remain slightly lower than building, WT notes that the next cost cycle will be driven less by roads and rail, and more by renewables, transmission, and water infrastructure, creating new regional pressure points.
“The risk isn’t just price growth – it’s capability. Without renewed investment in skills and sector capacity, the next construction upswing could quickly strain delivery systems.”
Damon Roast, Construction Economist, WT
Despite the challenges, WT sees early signs of stabilisation in the economy and opportunities for better cost control through data-led digital solutions such as BIM.
