If you're working on a development pro forma and trying to figure out what construction costs might be at some point in the future, the surest bet is to assume that they will be more than they are today and that they will grow at a rate that exceeds the rate of inflation. And here's some historical data to back up this claim.

What here is, is a great post by Brian Potter, where he looks at various construction cost indices from about the last century to try and answer the question: does construction ever get cheaper? While the answer to this question is technically "yes", it is doesn't happen all that often. Typically, the average yearly increases look something like this:

And if you net out CPI from these figures, you get a table that looks like this:

If you're working on a development pro forma and trying to figure out what construction costs might be at some point in the future, the surest bet is to assume that they will be more than they are today and that they will grow at a rate that exceeds the rate of inflation. And here's some historical data to back up this claim.

What here is, is a great post by Brian Potter, where he looks at various construction cost indices from about the last century to try and answer the question: does construction ever get cheaper? While the answer to this question is technically "yes", it is doesn't happen all that often. Typically, the average yearly increases look something like this:

And if you net out CPI from these figures, you get a table that looks like this: