Cost of Building a Home in NZ Rises 3.5%
The latest QVcostbuilder data shows the average cost of building a new home in New Zealand’s four largest cities has risen on average by 3.5% in the year to May 2017 and a total of 25.5% since the previous peak of 2007.
QVcostbuilder 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.
It also shows the average cost * of building a standard 140 m², 3 bedroom, one bathroom home rose by the most in the Wellington in the year to May, up 2.43% to an average cost of $258,000. This compares to Auckland where costs rose 2.32% to $272,000; Dunedin, where costs rose 2.12% to $254,000; and Christchurch where they rose by the least over the past year, by 1.92% to $277,375.
QV National Spokesperson Andrea Rush said, “Auckland and Christchurch still remain the most expensive places to build a home out of the four cities measured by QVcostbuilder.”
“However, building costs rose by the most in Wellington over the past year as the housing market in the capital jumped more than 20.0%. While in Christchurch building costs rose by the least as the residential rebuild nears completion and demand is meeting supply for homes in the city.”
“Meanwhile, Statistics NZ building consent data shows a continuing flattening or downward trend in building consents across the country since numbers peaked at a 12-year high in mid-2016.
“This is in part due to stricter lending criteria from banks making it much harder for developers to gain finance for building projects."
"It also reflects the trend being seen in the housing market with the latest QV House Price index figures showing nationwide quarterly value growth has plateaued.”
“Meanwhile, Statistics NZ data shows the country’s population has grown by 97,000 over the past year: with 44,000 people moving to Auckland; 4100 moving to Wellington; 7100 moving to Christchurch and 1200 moving to Dunedin.”
“The downward trend in building consents and construction activity is concerning as it comes just at a time when more housing supply is urgently needed, particularly in Auckland."
“In terms of the various categories of residential buildings measured by QVcostbuilder, costs have increased the most in the large house category (between 200-600m²) with the price of building a house this size rising 3.39% over the past year and 38.6% since the previous building boom of 2007.”
“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 QVcostbuilder 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
QVcostbuilder 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.