Cost of building a home in NZ continues to rise

Dec 19, 2017 | News

Photo RNZ

QV costbuilder figuresshow the average cost of building a standard 140m², three bedroom, one bathroom home increased by the most in Wellington and Hamilton over the past year, up 2.1% to an average cost of $261,265 in both regions. In comparison, Palmerston North costs increased 1.7% to $257,250; Auckland costs rose 1.6% to $275,625; Dunedin costs increased 1.4% to $255,500; and Christchurch where costs rose by the lowest amount over the past year, 1.3% to $279,125.

QV costbuilder Spokesperson Greg Thompson said, “While building costs continue to rise, they are now rising at a slower rate than earlier this year which is likely caused by a slowing in the Christchurch region.”

“Auckland and Christchurch still remain the most expensive places to build a home out of the six cities measured by QV costbuilder.”

“In terms of the various categories of residential buildings measured, costs have increased the most in the large house category (between 200-600m²) with the price of building a house this size rising 3.2% over the past year and 39.1% since the previous building boom prior to 2007.”

One of the reasons for the increase in construction costs is the continued rise in labour pay rates. The latest Statistics NZ labour indices (September 2017) shows that labour costs have increased over the last year by 1.4% in Canterbury and 2.2% for the rest of New Zealand. This confirms that Canterbury’s rates are slowing from the peak of the reconstruction (4.3% in Mar 2013); whereas the rest of New Zealand has stayed relatively steady, at around 2%, for the last 6 years.

Meanwhile, Statistics NZ building consent data shows the seasonally adjusted number of new dwellings consented fell 2.3% (following a 5.9% rise in August). For houses only, the seasonally adjusted number fell 1.7% (following a 3.1% fall in August).

The trend for the number of new dwellings consented increased, and is at its highest level since early 2004.

The top three regions that consented to the most new homes in the year ending September 2017 were:
• Auckland – 10,317 new homes (up 2.9% from the September 2016 year)
• Canterbury – 5,122 new homes (down 18% as the post-quake rebuild continues to wind down, but still at a historically high level)
• Waikato – 3,596 new homes (up 1.7%)
The buoyancy in the building industry is also shown in the latest labour survey from Statistics NZ, which shows that construction employment increased over the quarter by 12,800 (5.4%), whilst over the past year it increased by 22,300 (9.9%).

However, skill and labour shortages have been identified as the construction sector’s biggest issue with more than 30,000 construction workers required in the next couple years and forecasts push this number to as high as 65,000 over the next five years.

This has resulted in NZ construction companies searching overseas to fill the shortage by launching ‘Look See Build NZ’ (http://www.lookseebuildnewzealand.co.nz/) with the aim to attract 20,000 construction professionals which includes engineers, builders, project managers, quantity surveyors, electricians, plumbers and scaffolders.

“It’s important to remember the average cost of building any home will always be dependent on the level of finishes, internal layout, and whether it has a single or double garage and these figures are averages.”

Also that QV costbuilder figures exclude other costs including:
• The cost of land
• Demolition of existing structures on the site
• Additional costs due to building code changes
• Increased structural requirements and external works such as landscaping, driveways and parking areas
• Utilities such as getting power, water, gas, drainage, phone/data mains from public connection to 3 metres from the building
• Balconies and covered ways
• Any loose furniture, fittings and equipment
• Professional, council, and legal fees
• GST
QV costbuilder is an arm of state-owned enterprise, Quotable Value (QV) and provides the latest construction cost data to the property and construction industries through an online subscription web platform tool, which can be accessed on any device. Subscribers can access a comprehensive range of building costs associated with the construction of various buildings, including residential and commercial properties.

QV costbuilder tracks the cost of a huge range of residential dwellings including small medium and large sized homes including one storey and two storey homes; multiple unit properties and two or three story townhouses; small apartments, multi-storey apartments and retirement village units and apartments.

QV costbuilder also provides costs on a variety of other buildings including industrial and commercial.

http://www.scoop.co.nz/stories/BU1712/S00584.htm

Recent articles

Annual Report

CHA’s Annual Report for 1st July 2019 to 30th June 2020

CHA’s Annual Report for 1st July 2019 to 30th June 2020

Strategic Plan

CHA’s Strategic Plan 2018

CHA’s Strategic Plan 2018

Featured Network

Residential Tenancies Act Community of Practice

Residential Tenancies Act Community of Practice

Our Place

Our Place 2017

Our Place 2017

Case Studies

Media Releases

The Shift Aotearoa conference 2021 issues papers released

Community Housing Aotearoa’s three pre-conference work programmes are kicking off next week with initial zoom meetings in the Narrative Transformation and Housing System Settings streams scheduled for Tuesday 26 January at 10AM and 1PM respectively. Issues papers to...

News

CHA Level 4 Guidance Document 8 September

CHA Level 4 Guidance Document 8 September Community Housing Aotearoa (CHA) has put together this document to consolidate information, contacts, resources and advice to help you in your day to day service delivery and decision making. It will be updated as new...

Community Housing Aotearoa (CHA) COVID-19 Update 26 August 2021

Message from CHA's Chief Executive, Productivity Commission Submission - Include Housing in the Terms of Reference, CHA's support for members, sharing ideas and issues, Ministry of Health information and advice, Government support for your organisation, important...

Newsletters

Community Housing Aotearoa (CHA) Newsletter 30 August 2021

Message from Chief Executive, Support for Members, CHA Regional Event Series, #right2housing - Episode 2, Community Finance named as finalists at Sustainable Business Awards, Feedback sought on draft strategy and planning policy for housing measures, An update on the...

Community Housing Aotearoa (CHA) Newsletter 18 August 2021

Community Housing Aotearoa COVID-19 Update, Message from CHA's Chief Executive, CHA's support for members, Sharing ideas and issues, Ministry of Health information and advice, Government support for your organisation. Community Housing Aotearoa (CHA) Newsletter 18...

Community Housing Aotearoa (CHA) Newsletter 16 August 2021

Warm Welcome for CHA's new Chief Executive, CHA Regional Event Series, Masterclass Webinar on Place-based initiatives: Save the Date! Government Reinstates Operating Supplement. On-going Engagement Underway - HRC Framework Guidelines on the #right2housing in Action....

Community Housing Aotearoa (CHA) Newsletter 3 August 2021

CHA Regional Event Series, Human Rights Commission Framework Guidelines on the Right to a Decent Home, Stories of Homelessness: When the Dominoes Start to Fall, Tenancy Management - Code of Practice, In the News, EVENTS, Upcoming Homestar v5 Events. Community Housing...

Submissions

Legislation

Reports

Te Whakaruruhau Report

The Te Whakaruruhau Report establishes the peak body services to the Homelessness Sector by Te Matapihi he Tirohanga mō te IwiTrust and Community Housing Aotearoa. The report can be found here: Te Whakaruruhau September 2020

Research

Following the money

http://www.buildingbetter.nz/publications/contestable_research_projects/Saville-Smith_2018_following_the_money.pdf

BRANZ research report on ‘exceeding the minimum’ released

This report looks at the question: why don’t landlords choose features that exceed the minimum building standards and what are the enablers to changing this? The aim is to identify the barriers to an improved rental stock and potential solutions to overcome the...

Community Housing Aotearoa

Contact Us

Contact Info

Level 11, Ranchhod Tower,
39 The Terrace /
102-112 Lambton Quay
PO Box 11543
Wellington 6142

+04 385 8722

support@communityhousing.org.nz

Follow On