The State Government wants to understand why there has been a cost increase in building materials, and how that impacts housing affordability.
Following price gouging concerns, the State Government called for the Australian Competition and Consumer Commission (ACCC) to conduct a review.
Minister for Housing and Urban Development Nick Champion wrote to the ACCC to conduct the review and take a more active role in monitoring construction price materials.
"Providing certainty to South Australia's building and construction industry is vital in ensuring their customers aren't caught having to pay more or wait for longer for their builds," he said.
"I would welcome an intervention on behalf of the ACCC to investigate allegations of price gouging and the cost of materials in the sector.
"Housing affordability is already under severe pressure, the last thing South Australians need is increased prices providing instability in the market."
According to Australian Bureau of Statistics figures, building products rose by 3.8 per cent during the December quarter and are now 12 per cent higher than a year ago.
The increase has seen severe price hikes to building materials over the year to December 2021 including:
The rapid increase in pricing has seen home builders locked into fixed price contracts which is inconsistent with the current changing market with some even going into receivership.
Subsequently, disturbing allegations of predatory pricing and price gouging with suppliers and wholesalers taking advantage of short supply and increased demand have surfaced.