Residential construction costs have continued to edge upward, despite lower diesel prices.
QV CostBuilder’s latest update captures more than 11,400 material price movements across six main centres, including Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.
It shows that diesel prices fell by 18.9% between the end of April and May, easing pressure on fuel-intensive areas of construction.
However, costs have still risen overall, with the average building cost per square metre for residential buildings increasing by 1.6% in the three months to the end of May 2026 and by 2.4% annually.
QV CostBuilder spokesperson and quantity surveyor Martin Bisset said diesel prices had not fallen enough to offset price rises elsewhere.
“The reduction in diesel prices has provided some much-needed relief for fuel-intensive areas of work, but it hasn’t been enough to stop residential construction costs from rising overall,” he said.
“The steep price of fuel has obviously been the most pressing issue in recent months. We’ve seen some of that pressure ease now, but diesel is still significantly higher than it was earlier this year and so it remains highly relevant and highly volatile.”
As a result, the excavation and piling trades recorded falls last month – down 5.1% and 0.9% respectively, largely due to the reduction in diesel prices.
At the same time, a range of commonly used building materials moved in the opposite direction, including garage doors (2.5%), framing timber (3%), ready mix concrete (4.1%), fibre cement cladding (4.8%), cedar cladding (21%), PVC pressure pipework (18.8%), PVC drain, waste and vent pipework (21.6%), and polyethylene pipework (25%).
“The broader picture is still one of modest cost growth overall. Some costs have come back, but materials such as concrete, timber, cladding and pipework are still moving higher,” Mr Bisset said.
“Construction cost inflation is not running away right now, but it is still present. Anyone planning a build should allow for some movement in costs. Even modest increases can make a difference over the life of a project.”
Meanwhile, the average building cost per square metre for non-residential buildings – excluding educational buildings – has increased by 1% this quarter and by 1.8% annually.
QV CostBuilder is an online building cost platform that covers everything from building costs per square metre for warehouses, schools and office buildings, to the retail supply cost of more than 8,000 items, labour rates, labour constants, and more.
Visit QV CostBuilder at costbuilder.qv.co.nz.