Construction costs rise in Saudi Arabia and Australia

Construction costs in Saudi Arabia increased by 2.2 percent year-on-year in September, according to data from the General Authority for Statistics (GASTAT). The rise was driven by higher expenses for equipment rental, labor, materials, and energy. Specifically, non-residential sector costs climbed 2.6 percent, while residential costs rose 2.1 percent. Despite these increases, construction activity in the kingdom expanded for a fifth consecutive month, with the Al Rajhi Capital Saudi Construction Index remaining above the 50-point threshold.

In Australia, construction costs rose by 3.2 percent in the 12 months ending September, according to the Cordell Construction Cost Index. This acceleration follows a period of subdued conditions earlier in 2026. Industry experts attribute the rising costs to high oil prices, which impact both fuel for transport and the delivery of building materials. These escalating costs, combined with falling house prices, are reportedly threatening the feasibility of new residential developments and the nation’s housing supply targets.