According to QV’s Costbuilder database, the average cost of constructing a standard residential home rose by only 1.2% over the 12 months ending in August.
Costbuilder monitors the prices of over 60,000 building cost components, including materials, labour, and subcontracting fees. Out of these, 11,700 experienced price changes in the three months leading up to August, and the updated prices were utilised to determine the average cost of constructing a standard three-bedroom house.
This rose by only 0.2% in the three months ending in August this year, compared to 0.3% in the three months ending in May.
Construction costs rose by 1.2% in the 12 months ending in August, down from a 1.3% increase in the 12 months ending in May.
“Construction cost inflation has remained very subdued this quarter,” QV Costbuilder quantity surveyor Martin Bisset said.
The most significant price changes during the quarter were seen in reinforcing steel rods, which rose by 30-40% depending on the variety. Other key factors influencing cost changes were reinforcing mesh and insulation.
The slowdown in building cost inflation extended beyond residential construction, as average costs for non-residential buildings—excluding educational facilities—increased by only 0.2% in the three months to August and 1.0% over the 12 months to August.
Bisset said the cost growth remains in check, providing welcome stability after several turbulent years.