The average cost of building a home in Aotearoa New Zealand’s main centres has increased by less than half as much as last year.

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 per cent annually, including by just 0.9 per cent since June 2023.

This compares to an average annual increase of 11.3 per cent at the same time last year, and an average annual increase of 14.7 per cent 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, Martin wanrs that there's still a great deal of uncertainty at home and abroad, which makes it difficult to predict how construction costs will 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 depends on the buying power of the New Zealand dollar.”

Elemental rates have increased by 0.4 per cent on average since CostBuilder’s major update in June.

The cost of the frame and substructure went down 4 per cent and 2.9 per cent respectively due to the reduction in steel rates, but drainage and roofing went up by 5 per cent and 2.8 per cent respectively.

The biggest trade price change related to reinforcing steel, which reduced by 16.9 per cent due to a more favourable exchange rate.

However, infrastructure increased by 7 per cent due to increases in plant hire fees and drainage rates, with demolition also increasing by 5.1 per cent due to average increases for plant hire and tip fees.

“It’s important to remember these figures are averages and the cost of building will always be dependent on the level of finishes, internal layout, and all manner of other elements, including whether or not a home has a single or double garage.”

CostBuilder is an online subscription-based building cost platform, powered by state-owned enterprise Quotable Value, with a database of more than 60,000 rates across Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.

It covers everything from the building costs per square metre for warehouses, schools, and office buildings, to the approximate retail supply cost of GIB and more than 8,000 other items, plus labour rates, labour constants, and more.

Visit CostBuilder at costbuilder.qv.co.nz.