Source: Quality Valuation (QV)
The cost of building a home remains relatively stable, giving builders and developers greater certainty on price.
In QV CostBuilder’s latest quarterly update for August, approximately 11,700 new material and labour prices were applied to its database of more than 60,000 rates across Auckland, Hamilton, Palmerston North, Wellington, Christchurch, and Dunedin.
The average cost of constructing a standard one- or two-storey 150–230m² home in these centres rose just 0.2% over the past three months, following a 0.3% rise in the first half of 2025 and is in sharp contrast to the 44% increases seen between 2020 and 2024.
“Construction cost inflation has remained very subdued this quarter, with annual growth continuing to ease, down slightly to 1.2%, compared to 1.3% last quarter,” says QV CostBuilder quantity surveyor Martin Bisset.
The most notable price movements this quarter were Grade 500 reinforcing rods, up nearly 14%, and with the 16mm reinforcing rods up more than 30% in both Wellington and Dunedin. Other main contributors to the overall cost changes in Q3 were reinforcing mesh, fill material, and insulation,” he said.
Recent regulatory reforms may impact building costs in the medium term including the overhaul of building consents, the shift to proportionate liability, and the new rules on overseas products under the Building Product Specifications (BPS).
While these changes are intended to improve efficiency, competition, and supply resilience, the new overseas product rules aren’t expected to materially affect costs within the next six months. “Their success will depend on how well they are implemented and adopted across the industry. QV CostBuilder will track these materials alongside current ones if we can obtain rates from our suppliers,” he said.
More efficient consent processes should mean quicker approvals and earlier start dates, reducing upfront costs, though not the overall cost of a build. However, Bisset said, “Proportionate liability is harder to assess until details are finalised. If warranties are required, those costs will likely be passed on to developers and homeowners, and history tells us there can be challenges—for example, councils often carried the burden of leaky building claims when builders were no longer in business.”
Looking ahead, Bisset says many firms remain under financial strain, with conditions still subdued in the short term.
“The industry is waiting for the economy to improve before committing to new projects. Government moves to amend the RMA, open the door to overseas materials, and streamline consents are helpful, but restarting stalled projects would also provide much-needed confidence.”
“From 2026, stronger growth is expected as major transport, health, and education projects ramp up. For now, cost growth remains in check, providing welcome stability after several turbulent years.”
In the meantime, costs for non-residential buildings (excluding educational buildings) also rose modestly by 0.2% this quarter, with an annual cost increase of 1.0%. “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 11,700 current material prices were applied to its database of more than 60,000 rates, generating about 14,900 changes to the data across six centres.
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.
