Growth in building costs slows, but the outlook remains uncertain

Construction price growth is trending down although in an inconsistent way, according to New Zealand construction cost database QV CostBuilder, which measures costs in Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.

Between June and August, average prices changed by:

• +18.9% for malthoid dampcourse.
• +16.6% for diesel.
• +9.0% for gripset under tile membrane.
• +0.2% for a basket of plumbing items.
• +0.2% for a basket of materials.
• -0.7% for structural timber.
• -2.4% for timber cladding/decking.
• -9.1% for greenstuff insulation (excluding Auckland).

Earlier this year, QV CostBuilder quantity surveyor Martin Bisset said although construction costs continued to rise, the pace of growth had definitely slowed.

“It looks as though they are starting to level out now, with the worst of the construction inflation boom now firmly behind us and strong demand for materials and labour continuing to ease across much of the country,” he said.

However, Mr Bisset added there was still a great deal of uncertainty in the building industry and economy as a whole, making it hard to predict what would happen to costs in the months ahead.

Do your research before you start building

If you want to build a home, the most important thing to get right is the finance, because that will tell you up front whether the project is viable. I’ll be happy to explain how construction loans work, calculate your borrowing capacity and compare loans for you.

When you research builders, ask for references and evaluate them holistically. Don’t just focus on price, because the cheapest builder may not be the best.

You should take the same approach when engaging with other professionals, such as architects, town planners, property lawyers and project managers.