Inflation cools on paper, site costs still refuse to budge
The latest figures show inflation in Australia has stayed more “contained” through the final months of 2025. But if you’re on site, you know prices haven’t exactly eased off. Heading into 2026, tradies are watching two very different numbers: the one coming out of the ABS… and the one hitting everyone’s wallet.
When inflation cools on paper, wallets stay under pressure.
Let’s start with what the paperwork says. According to the Consumer Price Index from the Australian Bureau of Statistics, CPI rose 3.8 per cent over the 12 months to October 2025, up from 3.6 per cent the month before. Compared to the wild spikes of recent years, that sounds softer. It gives the impression inflation might finally be drifting back toward something close to normal.
But inside that 3.8 per cent are categories that don’t feel calm at all on site. Housing, in particular, keeps biting. For tradies carrying fixed costs, things still feel tight no matter what the headline numbers say.
When the number drops… but the hit doesn’t
Dig into the CPI and the story changes fast. Housing was the biggest driver, up 5.9 per cent year on year. That includes rent, energy and housing related costs, all things tradies feel every single month.
It is not just the cost of living. It is the cost of working. When rent climbs and power bills stay high, everything else shifts upward with it. For the spreadsheet crowd, inflation might look calmer. On site, plenty of necks are still tight from watching prices refuse to settle.
“CPI might cool, but the cost of building a house didn’t get the memo.”
Materials, labour and budgets that won’t loosen
Add the Producer Price Index into the mix and the picture stays stubborn. Construction input costs remain firm, driven by expensive labour and demand that hasn’t really let go. Materials haven’t dropped at the pace many hoped for, and the vicious circle keeps spinning. Every delay seems to come with another hidden cost.
For tradies, this doesn’t feel like “inflation under control”. The hit to the wallet still lands like a solid jab to the guts. The headline number might calm markets, but site life is still running under pressure.
2026 kicks off, and no one thinks it eases up
We are only just kicking off the year, and January rarely brings relief. It brings adjustments. New rates, new contracts and new costs quietly creeping upward. Even if inflation cools on paper, expectations on site are clear. Early in the year is when everything gets reshuffled.
The real question is not whether inflation dipped a little. It is when that dip actually shows up where it matters. For now, the verdict on site is simple. The numbers might say things are cooling, but the blokes in boots and hi vis are still picking up the tab.
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This is not a story about wealthy people whinging over expensive finishes. This is about ironclad contracts, untouchable builders and a client who says he was left with a rubbish penthouse and then threatened on top of it. The video has already gone viral, and what it shows is hard to ignore while the whole industry watches. This is exactly the kind of yarn that gets passed around on smoko, coffee in hand.