The cost of building a house has risen almost 30% in the past decade, but by dollar value Dunedin remains one of the best areas for value.
In the latest "costbuilder" data collated by Quotable Value, the average cost of building a new home in six of New Zealand’s main centres rose 2.7% on average for the year to October and has risen 27.4% since the previous market peak of 2007.
QV costbuilder spokesman Greg Thompson said while building costs continued to rise, that growth was slower than earlier in the year, probably because of a slowing in the Christchurch region.
When building costs are paired with other national affordability data, Dunedin remains one of the more affordable areas around the country. QV’s average costs are based on a standard 140sqm, bare three-bedroom, one-bathroom home, omitting the most basic of frills, from driveways to car parks and, crucially, local council costs.
Mr Thompson said of the categories of residential buildings assessed, costs had increased most in the large house category, of between 200sqm and 600sqm, rising 3.2% during the past year and 39.1% since the building boom before 2007.
One of the reasons for the increase in construction costs was the continued rise in labour pay rates, the latest Statistics NZ labour indices showing they had increased 2.2% nationally over the past year.
Mr Thompson said while construction workforce numbers had increased 22,300, or 9.9%, over the past year, skill and labour shortages had been identified as the construction sector’s biggest issue.
He said more than 30,000 extra construction workers would be required over the next two years and some forecasts pushed that number to as high as 65,000 over the next five years.
The top three regions in terms of consented new homes in the year to September 2017 were Auckland, up 2.9% on a year ago, at 10,317 new homes, Canterbury down 18% at 5122 and the Waikato, up 1.7%, at 3596.
• The QV data excludes, among others, costs relating to land, demolition, GST, structural requirements, landscaping, driveways, car parks, getting power, water, gas, drainage and phone/data mains to within 3m of the house; balconies and professional, council and legal fees.
Average building costs
Wellington up 2.1% at an average cost of $261,265.
Hamilton up 2.1% at an average cost of $261,265.
Palmerston North up 1.7% at $257,250.
Auckland up 1.6% at $275,625.
Dunedin up 1.4% at $255,500.
Christchurch up 1.3% at $279,125.
SOURCE:QV
