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-19 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 the February and May quarters.
Project cost confidence
QV CostBuilder spokesperson Simon Petersen says 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.
Petersen says the average building cost per square metre for non-residential buildings had also increased by 0.2% this quarter.
This represented 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,” Petersen says.
Economic and geo-political uncertainty
“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. On average, each trade rate also increased by 0.2% this quarter, with hardware and demolition up 2.9% and 1.4% respectively.
In contrast, the cost of steel framing reduced by 5.7%, and suspended ceiling costs dropped by 4.5% due to a reduction in suspended ceiling framing and panel rates.
QV CostBuilder is an online subscription-based building cost platform, powered by state-owned enterprise Quotable Value (QV). It covers everything from the building costs per square metre for warehouses, schools, and office buildings, to the approximate retail supply cost of GIB and more than 8000 other items, plus labour rates, labour constants, and more.
In a change to previous years, QV CostBuilder now has four quarterly updates a year — in February, May, August, and November — with monthly updates in between.
For more information, visit costbuilder.qv.co.nz.
