Unity Jackson-Muir, Real estate reporter
First published 28 Oct 2026, 5:00am
Spending on new data centre developments has surged ahead of offices and warehouses.
Australia is spending more money building data centres to power the AI revolution than new offices and warehouses where humans will work, new figures show.
The analysis of ABS Building Activity data showed spending on electricity hungry data centres has surpassed the amount being invested in the construction of offices and warehouses combined.
About $18.2 billion of work was started between 2025 and 2026 in the category that includes new data centre developments, compared with $10 billion of work on new warehouses and $7.3 billion on new offices.
The surge in data centre building has been flagged as inflationary, with the RBA recentlly noting that it was one of the forces fuelling the sticky inflation that’s led to interest rate hikes and, in turn, falling property prices.
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$18.2b worth of work was started on projects including data centres last financial year.
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The ABS data tracks 15 categories of non-residential property in terms of how much work has been started, finished or is yet to be done.
The category that includes private investment in data centres was ranked 14th in the 2019/20 financial year but surged to the number one spot last year.
About $6.4 billion of construction work was done in the data centres category over the most recent financial year and projects worth just $2.4 billion were finished.
At the end of June, $18.3 billion of work in the category was still to be built.
While constructing a massive data centre involves thousands of tradespeople, an operational facility typically requires only 20 to 50 permanent staff members on site.
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Australia is spending more on building data centres than any other non-residential properties. Analysis: Primara Research / Green.com.au.
The analysis also noted that data centres were getting built at a much slower rate than other non-residential developments.
Data centres that have been built are already draining huge amounts of power from the residential electrical grid and are expected to draw down even more energy.
The Australian Energy Market Operator expects electricity usage by data centres on the southeast grid to triple by 2030.
The AEMO projects data centres will account for 13 per cent of total usage by 2036.
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The Australian Energy Market Operator projects 13 per cent of electricity in the southeast grid will be used by data centres.
The analysis was done by Primara Research for Green.com.au and found data centres made up 66 per cent and 33 per cent of the total electricity demand in NSW and Victoria respectively.
Dave Green, founder of renewable energy company Green.com.au, said the government needs to plan ahead for the consequences of electricity-intensive industries like data centres.
“Government, business and the public all have to think about what supplying an industry like this does to the grid,” Mr Green said.
“Businesses and households that generate their own power are in a stronger position, but the cost of keeping the grid reliable for everyone else is increasingly a question for government and the wider economy,” he said.
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