Good news for developers, builders

The cost to build a home has largely stabilised for the time being, giving builders and developers more certainty on price than at any point since the onset of the Covid pandemic.

In the latest QV CostBuilder quarterly update for August, approximately 12,700 of the latest material and labour prices were applied to its vast database of more than 60,000 rates across Auckland, Hamilton, Palmerston North, Wellington, Christchurch, and Dunedin.

It showed that the average building cost per square metre for residential buildings has increased by 0.3% this quarter – the same rate of increase that was reported in both of the February and May quarters.

QV CostBuilder spokesperson Simon Petersen commented: “This is good news for anyone looking to build right now, as it will give them more confidence that the estimated cost of a project will indeed be in the same ballpark.”

He said the average building cost per square metre for non-residential buildings had also increased by 0.2% this quarter, representing a slight reduction in the rate of quarterly growth from 0.3% and 0.4% in February and May respectively.

“What we’re continuing to see is building cost inflation returning to much more ‘normal’ levels. However, there is still an abundance of economic and geo-political uncertainty that has the potential to impact construction costs moving forward. This includes the possible escalation of conflicts in the Middle East and Ukraine, which could affect global supply chains.”

The biggest elemental price increase since QV CostBuilder’s last quarterly update in May this year related to interior doors, which went up 0.9% due to an increase in hardware rates. Costs related to sanitary plumbing also increased by 0.5%, mainly due to an increase in copper pipework rates.