Queensland Construction Costs Stabilise: Escalation Forecast Eases from 8% to 6%

Shayne Dunstan
Jul 30
2 min read

Good news for Queensland bodies corporate and property owners: construction costs have stabilised, and the outlook for the remainder of 2026 is considerably calmer than it looked six months ago.

Rawlinsons' latest Market Insight (July 2026) confirms the pricing volatility seen in the first quarter — driven by contractors' perceived risk from the Middle East conflict — has now settled. Brisbane's projected construction cost escalation for 2026 has been revised down from 8% to 6%, a meaningful reduction that flows directly through to building replacement costs.

Brisbane 2026 escalation: 8% → 6% · Feared fuel-crisis worst case: double digits — didn't happen · Higher escalation deferred to 2027

Construction Cost Escalation Could Have Been Much Worse

Rawlinsons' April edition warned that its forecasts didn't account for fuel crisis impacts at all — and that prolonged fuel disruption could add a further 6–9% on top of the 8% baseline, potentially pushing Brisbane escalation well into double digits! That scenario has not materialised. Fuel-related pressures have eased, suppliers are removing fuel levies, and with several large projects delayed reaching the market, short-term pricing has become more competitive. The higher-than-average escalation previously expected for Queensland is now not forecast to commence until 2027.

What This Means for Your Strata Insurance Valuation

A building insurance valuation must allow for cost escalation over the policy period and the time it would take to rebuild after a total loss. A shift from 8% to 6% — rather than the double-digit escalation that was a genuine risk only three months ago — means sums insured calculated on the higher forecast may now carry headroom, and schemes falling due for their next valuation can expect escalation allowances to reflect the more moderate outlook.

With higher escalation now pushed out to 2027, the coming months are a window of relative cost stability — a sensible time to review your scheme's insurance valuation and ensure your sum insured is current, so you're neither under-insured nor paying premiums on an inflated figure.