The state of the construction industry
QV CostBuilder revealed that the cost of building a new three-bedroom home in 2022 has blown out by more than 20% compared to the same time last year. Further unwelcome news is that this is not the end of the price hikes.
The cost of steel has also risen by almost 30%. External works, piling, and excavation are up by 11%. The rising cost of concrete and structural steel is having a knock-on effect on the cost of stairs and balustrades, which have risen by 17%.
Unfortunately, price rises are across the board, as even windows and exterior doors have gone up by 8%. Adding to the challenge is the cost of living pay rises for many of the trades, which have risen on average by about 7%.
We have always had price rises in construction costs, but it’s rare for the industry to experience so many double-digit increases across the entire supply line. Plus, we are yet to feel the full impact of inflation and interest rate rises, which have historically added pressure to construction costs.
After an in-depth market study, the Commerce Commission voiced concerns about a shrinking list of suppliers and suspected that some of them may be resorting to using loyalty payments and rebates to reduce competition.
Delays in supply lines and the increased cost of shipping are also having an impact on the cost of building a new home in New Zealand. For example, the cost of shipping a 40-foot container has increased by up to twelve times, and delivery takes 8 to 11 weeks.
Options for new home builders have?
Despite all the doom and gloom, there are still good reasons to build a new home in New Zealand rather than wait. There is no reprieve from the current challenges expected down the line. Waiting for a better economy could mean you still miss out, and there are no guarantees prices will drop when the market stabilises.
However, if you are planning to build a new home, a construction estimator service can streamline the process while ensuring you receive honest prices for all your construction costs. Call today to learn more about how Newin Building Estimating Service will get you into your new home faster with less hassle.
How to get the most value out of a new home build in New Zeland
With so much uncertainty in the building industry, and no sign of it improving any time soon, getting the most value out of a new home build will continue to be a challenge for home owners.
Construction cost estimators like Newin Building Estimating Services are a professional service with extensive experience in the building industry and associated trades. If you are looking to understand the latest building costs in Auckland, reduce your building construction costs and streamline your building project, a building cost estimator can help.