The cost of building a new home is pushing up – but not as fast as earlier predictions suggested.
By Susan Edmunds of RNZ
QV CostBuilder's latest update showed the average building cost per square metre for residential buildings lifted 1.6% in the three months to May, and 2.4% over the year.
At the same time, diesel prices fell 18.9%, which eased pressure on fuel-intensive areas of construction.
When conflict in the Middle East first put pressure on fuel prices, there were warnings there could be steep rises in construction costs, although some were not expected to filter through until later in the year.
Quantity surveyor and QV spokesperson Martin Bisset said the reduction in diesel prices in May had helped but was not enough in itself to stop prices rising.
"The steep price of fuel has obviously been the most pressing issue in recent months. We've seen some of that pressure ease now, but diesel is still significantly higher than it was earlier this year and so it remains highly relevant and highly volatile."
He said garage doors, timber, concrete, cladding and pipework had all increased in price. PVC products jumped significantly.
"I'm sure some of the suppliers or builders may well have been holding on to some of these costs because they want the work and they're thinking 'if we start putting up these costs, somebody else is maybe going to beat us, and so we need to try and work our way through it'.
"Obviously, they've got to ensure they're not going to push themselves to a cash-flow crisis. But what I would say is other costs are starting to increase. We probably saw more material prices increase last month than I had done for quite an amount of time.
"We look at many, many material costs. The main ones we would probably look at is things like concrete, it's gone up - we need concrete. We have got most of the framing timbers, they went up about 3%. They form quite a lot of the cost of building... plasterboard, our gib board, has gone up last month as well. We are starting to see some increases in cost, they individually only add certain percentages of cost to a building but they are starting to fill in here."
He said it was fortunate that diesel prices had fallen a bit. "We did have a high of not far off about a 98% or 100% increase since a few months ago, now we're only around 70%. But that's still quite a large amount. When you think we've gone up from $2.50 to $3.30, it's a lot."
Data on Wednesday showed 3692 residential dwelling building consents were issued in April, an increase of 11%.
Over the year, there were 39,087 – 17% higher than the April 2025 year.
Townhouse consents were up 19%, and made up 43% of all dwelling consents in the year.
Infometrics said it did not expect higher building cots to show in consenting activity until the May data, at least.
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