QV CostBuilder is New Zealand’s most comprehensive construction cost database. More than 42,000 rates were updated in November, with the average cost of building a standard three-bedroom home increasing by 4.9% annually, including by just 0.9% since June 2023.
This compares to an average annual increase of 11.3% at the same time last year, and an average annual increase of 14.7% at the end of November 2021.
CostBuilder spokesperson and quantity surveyor Martin Bisset commented: “Construction costs have all-but stabilised throughout the second half of this year, reflecting a somewhat improved economic outlook internationally and an easing in the global supply chain issues that arose throughout the Covid-19 pandemic.
“Fuel costs have largely stabilised for the time being, inflation is in slow decline, and interest rates are expected to be at or near their peak now. These factors and others closer to home – including increased migration helping to fill labour shortages – are currently keeping rising costs in check.”
However, Mr Bisset warned that there was still a great deal of uncertainty at home and abroad, which made it difficult to predict how construction costs would continue to evolve into 2024 and beyond. “Economic conditions remain highly volatile – not least because of the war in Ukraine and the Israel-Hamas conflict.”
“There’s still a question of whether or not interest rates will ease at all next year, and by how much will depend on inflation being contained. As we rely on importing a lot of building materials in this country, a lot also dep
