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Rising Western Sydney construction costs are placing renewed pressure on apartment feasibility, project delivery and the broader challenge of increasing housing supply across NSW.

In a recent 7NEWS Exclusive, Newton Fisher Group National Director Steven Bregovic was featured alongside other industry leaders to discuss the growing cost pressures affecting residential development in Sydney’s west. The report examined how global supply volatility, material price increases, delivery costs, taxes and levies are making it increasingly difficult for some apartment projects to remain commercially viable.

The issue is not simply that construction has become more expensive. The challenge is the speed and breadth of escalation. According to the 7NEWS report, a $100 million project that commenced at the start of the year would now cost around 4 per cent more, with Steven warning that escalation could trend towards 10 per cent when all factors are considered.

For developers, financiers and project teams, these increases can be the difference between a feasible project and one that needs to be redesigned, repriced, delayed or placed on hold.

Why construction cost escalation matters

Construction cost escalation affects every stage of a project’s lifecycle. Early feasibility studies, development approvals, funding arrangements, procurement strategies and delivery programs all rely on accurate and current cost assumptions.

When those assumptions shift rapidly, project viability can change just as quickly.

The 7NEWS segment highlighted cost pressure across a range of materials and trades, including plumbing pipework, electrical cabling, engineered timber products, excavation works and delivery costs. These pressures are connected to inputs such as plastic, copper, adhesives, diesel and oil-related products, all of which can be affected by global market volatility and supply disruption.

This is particularly challenging in Western Sydney, where demand for housing remains strong but project economics can be finely balanced. If costs rise faster than end values, developers have fewer options to absorb the increase.

The Fairfield example

The report also examined a residential project in Fairfield, where the numbers illustrate the issue clearly. To be commercially viable, the build cost needed to sit at around $500,000 per unit. The projected cost was closer to $650,000 per unit, placing the project under significant pressure and contributing to it being put on hold.

As Steven Bregovic noted in the segment, once the full cost position was factored in, the project was “not financially sustainable.”

This example demonstrates why cost planning is not just a technical exercise. It is a critical commercial tool that helps developers, lenders and stakeholders understand whether a project can proceed with confidence.

The role of quantity surveying in a volatile market

In stable market conditions, a project estimate may provide a useful benchmark at a point in time. In volatile conditions, cost planning must be more dynamic.

A strong quantity surveying process should test feasibility assumptions early, identify cost risks, monitor escalation, compare procurement options and support value management decisions before costs become locked in. This is especially important for residential projects where margins, funding requirements, presales, land values and construction costs are closely connected.

At Newton Fisher Group, our services include cost planning, feasibility studies, bank reporting, council development cost estimates, value management and engineering, project and contract administration, technical due diligence, independent certification and expert witness services. Our team supports clients across residential, commercial, aged care and health, industrial, education and other sectors.

That breadth of experience allows us to provide practical, data-led advice throughout the full project lifecycle, from early feasibility through to procurement, delivery and final account.

What project teams should consider now

For developers and project owners navigating current market conditions, early and regular cost advice is essential.

Project teams should be asking:

Are our feasibility assumptions still current?
Have we tested escalation scenarios?
Are there value management opportunities that can be explored without compromising the project brief?
Do procurement strategies reflect current market conditions?
Have lenders and stakeholders been given a clear picture of the project’s cost risk?

None of these steps removes market volatility, but they create greater visibility and control. In many cases, early advice can help project teams make better decisions before financial exposure increases.

Keeping viable projects moving

The 7NEWS story reinforces an important point for the construction and property industry: housing supply depends not only on planning approvals and demand, but also on commercial feasibility.

When the numbers do not work, projects stall. When project teams have accurate, independent and current cost advice, they are better positioned to respond, adapt and keep viable projects moving.

Newton Fisher Group will continue to support developers, builders, financiers, property owners and project stakeholders with trusted quantity surveying advice tailored to the needs of each project.

For assistance with cost planning, feasibility studies or value management, contact Newton Fisher Group to discuss your project.