The latest QV CostBuilder update shows residential building costs remain relatively contained, with the average cost per square metre rising 1.6% in the three months to May and 2.4% over the past year.
At the same time, diesel prices dropped 18.9%. The decline provided welcome relief for builders and contractors by easing transport and machinery expenses, helping offset other cost increases across the industry.
Quantity surveyor and QV spokesperson Martin Bisset said the fall in diesel prices during May provided some relief for the construction sector, but it was not sufficient on its own to offset other cost pressures still pushing building prices higher.
“The steep price of fuel has obviously been the most pressing issue in recent months,” he said.
“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.”
Bisset said a range of key building materials continued to rise in price, including garage doors, timber, concrete, cladding and pipework. PVC products recorded some of the sharpest increases.
“I’m sure some of the suppliers or builders may well have been holding on to some of these costs because they want the work and they’re thinking ‘if we start putting up these costs, somebody else is maybe going to beat us, and so we need to try and work our way through it’.
“Obviously, they’ve got to ensure they’re not going to push themselves to a cash-flow crisis. But what I would say is other costs are starting to increase. We probably saw more material prices increase last month than I had done for quite an amount of time.
“We look at many, many material costs. The main ones we would probably look at are things like concrete; it’s gone up – we need concrete. We have got most of the framing timbers; they went up about 3%. They form quite a lot of the cost of building… Plasterboard, our gib board, has gone up last month as well. We are starting to see some increases in cost; they individually only add certain percentages of cost to a building, but they are starting to fill in here.”
Bisset said builders had benefited from a modest fall in diesel prices, but fuel costs remain far above historic levels. Although prices have come down from peaks that nearly doubled, diesel is still around 70% more expensive than it was previously, having climbed from roughly $2.50 a litre to $3.30.