Source: Quotable Value
Tuesday, 1 September 2026
Construction costs are on the rise again, with rebounding diesel prices putting pressure on some of the most fuel-intensive trades.
QV CostBuilder’s August figures show the average building cost per square metre for residential buildings increased by 1.1% this quarter, lifting annual residential building cost growth to 3.3%.
The rise follows two months of relative stability, with higher diesel costs once again feeding into trades such as excavation and demolition.
QV CostBuilder quantity surveyor Martin Bisset said diesel prices had rebounded in August after falling sharply in July.
“Fuel remains one of the most volatile inputs in construction. Lower diesel prices helped keep construction costs broadly stable in June and July. Diesel bounced back in August, and construction costs have moved higher as a result.
“The effect is most obvious in fuel-hungry trades such as excavation and demolition, where machinery and transport make up a much bigger part of the job.”
Most notably, excavation costs increased by 4.3% in August, driven largely by higher diesel rates. Demolition costs also increased by 3.7%, reflecting higher diesel and imported fill material rates.
“Excavation and demolition are particularly exposed to fuel movements, so when diesel jumps, those trades tend to feel it quickly,” Mr Bisset said.
“The broader picture is still one of modest growth. Construction cost inflation is not running away, but neither has it disappeared. Anyone budgeting for a build still needs to allow for movement, particularly in fuel-sensitive parts of the job.”
QV CostBuilder’s August update applied 11,400 current material prices to its construction cost catalogue, resulting in 26,500 data changes across six centres: Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.
On average, trade rates increased by 0.5% from July to August, with other notable increases including roof coverings (1.7%), joinery (1.4%) and glazing (0.9%).
Meanwhile, the average building cost per square metre for non-residential buildings, excluding educational buildings, increased by 0.5% this quarter and by 2% annually.
QV CostBuilder is New Zealand’s most comprehensive online building cost platform covering six centres – Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.
It encompasses everything from building costs per square metre for warehouses, schools and office buildings, to the supply and install cost of more than 10,000 items, labour rates, labour constants, and more.
Visit QV CostBuilder at https://costbuilder.qv.co.nz/.