Build costs are forecast to rise 13.1% over the next five years.   Tender prices up 15.5% over the same period.   That's a fundamental shift in what it costs to deliver a project.   Here's what's driving it.   Middle East conflict pushing Brent crude above $100 per barrel. Energy intensive materials getting more expensive. International shipping delays.   Supply chain disruption feeding through gradually.   And the interest rate outlook has flipped completely.   At the start of 2026 markets were pricing in two rate cuts this year. Now? Cuts are off the table. A hike is a possibility.   For anyone developing property that combination of rising build costs and no rate relief is a serious headwind.   But here's the nuance the headline misses.   Low activity is actually keeping a lid on tender prices right now.   Contractors are competing hard for work. They can't pass all the cost increases on because the demand isn't there to support it.   So the full 13.1% isn't landing immediately. It's coming gradually as activity recovers from 2027 onwards.   What does this mean in practice?   Projects starting now where you can lock in fixed price contracts with builders are in a better position than projects starting in 2027 or 2028 when demand recovers and contractors have more pricing power. ©️Jim Holland on LinkedIn

Posted by Cristian Bunescu at 2026-07-10 11:43:06 UTC