Market Update - April #3
The Construction Cost Tsunami Is Here - and It's Making Established Lower North Shore Homes More Valuable by the Week
If you have been weighing up whether to build or buy established on Sydney’s Lower North Shore, the past six weeks have settled the argument.
The construction cost crisis triggered by the Middle East conflict is no longer a forecast. It is a live, accelerating reality – and it is reshaping the economics of new versus established property in ways that will compound over the next two to three years.
Boral, one of Australia’s largest building materials companies, has more than doubled its concrete surcharge since March. A production and transport levy of $18.84 per cubic metre – up from $8.14 just a month prior – now applies across the country, with Boral explicitly citing “recent escalations in global energy, commodity and supply chain costs.” That is not a rounding error. On a typical residential slab, it translates to thousands of dollars added to a build cost almost overnight.
The pressure is not limited to concrete. Tradelink has told customers it will lift toilet and toilet seat prices by 35 per cent from June, with plastic piping increasing by approximately one-third. Reece Group has already moved, lifting plastic pipe prices by up to 36 per cent effective May 1. Building products across the board – cement, timber, PVC, brass fittings, tapware – are absorbing the oil price shock from a conflict that shows no signs of resolution.
Industry forecaster CBRE projects construction costs could surge approximately 18 per cent over the 2026-27 financial year alone, before moderating to an average 6.5 per cent annual increase through to 2030. Sydney’s relatively more contained pipeline of 4 per cent cost growth this year is the more modest of the national figures – and it is still punishing for anyone mid-build or planning to break ground.
“Every week that passes, a new home on the Lower North Shore gets more expensive to build relative to what an equivalent established property costs to buy. That gap is widening fast. Buyers who understand this are pivoting to established homes.”
JEREMY MARTIN
Director, Mazar Martin Buyers Advisory – Buyers Agents, Lower North Shore
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The timing matters. Mosman, Cremorne, Neutral Bay and Cammeray are not suburbs where large new-build pipelines exist. The housing stock is established, often heritage-affected, and in genuinely short supply. When construction costs make new residential development economically unviable at scale, demand consolidates around what already exists. That is precisely the type of stock Mazar Martin’s clients are positioned to acquire.
The established premium has also widened at the top end. New listings in the Lower North Shore’s final week of March came to market at an average guide of $5.8 million, against an average sale price across completed transactions of $4.59 million. That spread reflects a genuine negotiating environment – and it sits against a backdrop of rising replacement costs that make every well-located, completed home increasingly difficult to replicate at any price.
“The numbers don’t support a knockdown-rebuild the way they might have eighteen months ago. Once you factor in current build costs, contingencies, holding costs, and now these material surcharges on top of an already volatile construction market – the established home wins on value and on certainty.”
CHELSEA WAEREA-HARGREAVES
Director, Mazar Martin Buyers Advisory – Buyers Agents, Lower North Shore
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Gerard Mazar puts it plainly. “You cannot build a four-bedroom Mosman house on 700 square metres in 2026 at anywhere near what you can buy one for today. In two years’ time, that gap could be wider. We are actively helping buyers into established homes on the Lower North Shore right now – and the clients who move in this window are locking in value that the construction market is making harder to replicate by the month.”
GERARD MAZAR
Director, Mazar Martin Buyers Advisory – Buyers Agents, Lower North Shore
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Gerard Mazar
DIRECTOR · MAZAR MARTIN BUYERS ADVISORY
Gerard is a specialist buyers agent on Sydney’s Lower North Shore with deep expertise across Mosman, Neutral Bay, Cremorne, and the wider harbourside market including suburbs surrounding Willoughby to Chatswood. His buyers advisory work is built on long-standing agent relationships and intimate knowledge of the LNS micro-markets.
Jeremy Martin
DIRECTOR · MAZAR MARTIN BUYERS ADVISORY
Jeremy is a specialist buyers agent on Sydney’s Lower North Shore with deep expertise across Mosman to Cremorne, but also Lane Cove, Cammeray, Crows Nest. His buyers advisory work is built on rigorous daily market intelligence, long-standing agent relationships, and an instinct for identifying motivated sellers and off-market opportunities before they reach the public market.
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