The latest CPI for the March quarter shows that housing inflation continues to accelerate tracking at 6.6% in NSW over the previous 12 months to March 2026.

High housing inflation is threatening the viability of new housing projects by pushing the cost of new housing construction up even higher.

Matthew Pollock, Executive Director of Master Builders NSW said, “It means new projects are not stacking up commercially and we haven’t yet seen the full impact of cost escalations resulting from the Iran War supply chain disruptions.

“The costs of building materials were escalating even before the Iran war related fuel shocks. It’s clear that the Federal Government’s economic policy settings were not right even before the bombs started falling in Tehran and Tel Aviv.

“We should have been seeing measures to boost construction industry productivity through building capacity in the construction workforce and supply chains to help put downward pressure on costs.

“We have missed the housing accord targets in NSW across every data release since they were announced.

“We are almost certainly facing another rise in official rates which will place further pressure on project feasibilities and household borrowing capacity.

“While it remains too expensive to build, we will continue to build fewer homes.

“Cost pressure is now the number one issue affecting the construction industry, and high inflation in the housing sector has become a much broader economic problem." Matthew Pollock said.