Steady start to the year for construction costs
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07/03/2025. 06:07
KoreaPost
The latest figures from QV CostBuilder show that construction costs have remained relatively steady so far in 2025, amidst an ongoing downturn for the industry.
The average cost of building a standard one- or two-storey 150/230m² home in Auckland, Wellington, Christchurch, Hamilton, Dunedin or Palmerston North has increased by just 0.4% this quarter – slightly less than the 0.6% increase recorded in Q4 last year.
Annually, the cost of building a home in one of those six centres has increased by an average of just 1.5%, which is in stark contrast to the double-figure growth experienced throughout 2021, 2022, and 2023.
“Construction costs continue to flatten out for the most part, weighed down by challenging economic conditions and reduced demand as a result,” said QV CostBuilder quantity surveyor Martin Bisset.
“We all remember the Gib crisis three years ago. Fortunately, we’re not having any of these sorts of issues today – global supply chains are now operating more or less as they should be, and demand for materials has dropped dramatically. This is helping to keep a lid on prices.”
However, he warned that geopolitical instability had the potential to impact prices in the future.
“There continues to be high levels of tension and uncertainty in international relations right now, with armed conflicts, trade wars, and a general sense of political volatility posing a risk not only to construction costs but also to the economy as a whole,” Mr Bisset said.
“Anything that impedes the flow of goods across the world has the potential for increasing the difficulty and therefore the cost of acquiring building materials here in Aotearoa. We all saw the impact that Covid-19 had.”
In the meantime, the cost of building non-residential buildings (excluding educational buildings) has also remained steady; it increased by just 0.1% this quarter, with an annual cost increase of 1.2%.
That is also a smaller increase than in our Q4 update late last year, when costs were up 0.7% for the quarter and 1.4% for the year.
“Bear in mind that all of these figures are averages and the true cost of construction will always depend on the level of finishes, internal layout, and all manner of other elements,” Mr Bisset added.
QV CostBuilder is New Zealand’s most comprehensive subscription-based building cost platform. In this update, more than 11,500 current material prices were applied to its database of more than 60,000 rates, generating about 5,600 changes to the data across six centres.
Plasterboard linings and partitions were among the biggest movers this quarter, rising 1.8% and 0.5% respectively, due to increases in GIB® plasterboard and Pink Batts® insulation rates (up 5% and 4%, respectively). The cost of excavation (1.4%), site preparation (0.4%), substructure (0.4%), and exterior works (0.2%) also went up as a result of an increase in the cost of diesel.
Powered by state-owned enterprise Quotable Value, QV CostBuilder’s comprehensive database covers everything from the building costs per square metre for banks, schools, and office buildings, to the approximate cost per sheet of GIB and more than 8,000 other items. It also includes labour rates, labour constants, and much more.
Visit QV CostBuilder at costbuilder.qv.co.nz.
Source: QV