Housing Still Rising as Supply and Building Costs Bite

Low interest rates distorted property investment by making weak-yield assets attractive compared with cash, while subsequent rate rises initially unsettled buyers before the market adjusted. The latest increase has had little visible effect on buyer activity, with open-home attendance remaining strong and prices still rising. Supply remains the dominant issue: demand exceeds available housing, and completed homes are becoming more valuable because building and renovation are increasingly costly and uncertain. Construction inflation is being intensified by labour shortages, especially as major infrastructure projects such as South Road attract trades with far higher wages, pulling workers away from residential building. High-end construction faces acute shortages of skilled specialists, while shorter apprenticeships may further weaken quality and supply. Builders burned by fixed-price contracts during the COVID period, when materials surged far beyond quoted costs, are now more reluctant to offer price certainty. Elections appear to have far less effect on buyer behaviour than in the past, as policy differences on housing are seen as limited and uncertainty no longer meaningfully slows the market.