Source: CoreLogic
New Zealand’s residential construction costs are rising at one of the slowest annual rates on record with CoreLogic NZ’s latest Cordell Construction Cost Index (CCCI) recording a growth rate of 0.9% over the past year. (ref. https://www.corelogic.co.nz/news-research/reports/cordell-construction-cost-index )
The Q1 2025 national CCCI, which tracks the cost to build a typical new dwelling, rose 0.3% in the March 2025 quarter, down from 0.6% in Q4 and well below the long-term quarterly average of 1.0%.
CoreLogic NZ Chief Property Economist Kelvin Davidson said it’s the second-lowest annual increase since the index began in 2012 and a significant shift after the double-digit growth seen during the COVID-era construction boom.
The CCCI’s peak annual growth rate was 10.4% in Q4 2022, and the long-term average is 4.2%.
“After several years of intense upward pressure, construction costs have now settled into a much slower rate of growth,” Mr Davidson said.
“But this is a moderation, not a retreat. Labour doesn’t tend to get cheaper, and while materials pricing has flattened out, we’re not seeing any decline in the overall cost to build.”
The March quarter saw a familiar mix of price shifts across key materials. Roof flashings and sheet metal rose by 3–4%, structural steel ticked up by around 1%, while kitchen cabinetry fell 2% and plumbing PVC pipework and fittings dropped by 3%.
Mr Davidson said these changes reflect a sector returning to more normal patterns after several years of disruption.
“We’re well past the extremes of 2021 and 2022, where costs surged across the board. These days, we’re seeing more nuanced movements, driven by specific supply and demand factors rather than industry-wide pressure,” he said.
The sharp drop-off in new dwelling consents and eventual building work over the past 2-3 years has helped take the heat out of costs. Stats NZ figures show approvals are down across most regions in the past 12 months, except for Otago, which recorded a 25% lift.
Overall, national consent volumes are around one-third below their peak.
“Some builders now have spare capacity, which is helping cap further price rises,” Mr Davidson said.
“Some builders now have spare capacity, which is helping cap further price rises,” Mr Davidson said.
“Construction activity appears to have stabilised, however any signs of a recovery remain tentative.”
Looking ahead, Mr Davidson said easing interest rates and favourable lending conditions for new builds may support a modest lift in construction demand, but any return to the double-digit growth rates for costs experienced in 2022 is unlikely.
“If new-build activity picks up again, and there are signs it might, we could see construction costs start to rise a little more quickly over the next year or two,” he said.
“The key trend this year is construction costs are no longer spiralling but they’re also not falling. For now, we’re in a holding pattern, which will come as a welcome relief for builders, developers and households alike.”
CoreLogic NZ is a leading, independent provider of property data and analytics. We help people build better lives by providing rich, up-to-the-minute property insights that inform the very best property decisions. Formed in 2014 following the merger of two companies that had strong foundations in New Zealand’s property industry – Terralink Ltd and PropertyIQ NZ Ltd – we have the most comprehensive property database with coverage of 99% of the NZ property market and more than 500 million decision points in our database.
We provide services across a wide range of industries, including Banking & Finance, Real Estate, Government, Insurance and Construction. Our diverse, innovative solutions help our clients identify and manage growth opportunities, improve performance and mitigate risk. We also operate consumer-facing portal propertyvalue.co.nz – providing important insights for people looking to buy or sell their home or investment property. We are a wholly owned subsidiary of CoreLogic, Inc – one of the largest data and analytics companies in the world with offices in New Zealand, Australia, the United States and United Kingdom. For more information visit corelogic.co.nz.
We provide services across a wide range of industries, including Banking & Finance, Real Estate, Government, Insurance and Construction. Our diverse, innovative solutions help our clients identify and manage growth opportunities, improve performance and mitigate risk. We also operate consumer-facing portal propertyvalue.co.nz – providing important insights for people looking to buy or sell their home or investment property. We are a wholly owned subsidiary of CoreLogic, Inc – one of the largest data and analytics companies in the world with offices in New Zealand, Australia, the United States and United Kingdom. For more information visit corelogic.co.nz.
About Cordell Building Indices
The Cordell Building Indices (CBI) are a series of construction industry index figures that are used to monitor the movement in costs associated with building work within particular segments of the industry. The CBI indicate the rate of change in prices within particular segments of the New Zealand construction industry.
The changes in prices are measured daily through the use of detailed cost surveys, and are reported on a quarterly basis. This ensures the most current and comprehensive industry information available. Each index is based on a combination of labour, material, plant hire and subcontract services required to construct buildings within the particular segment being measured. The CBI measure the change in the cost of constructing buildings, and as such do not provide the actual costs.
The Cordell Building Indices (CBI) are a series of construction industry index figures that are used to monitor the movement in costs associated with building work within particular segments of the industry. The CBI indicate the rate of change in prices within particular segments of the New Zealand construction industry.
The changes in prices are measured daily through the use of detailed cost surveys, and are reported on a quarterly basis. This ensures the most current and comprehensive industry information available. Each index is based on a combination of labour, material, plant hire and subcontract services required to construct buildings within the particular segment being measured. The CBI measure the change in the cost of constructing buildings, and as such do not provide the actual costs.
