Costs rise for home builders

Pay rises for construction workers have boosted the cost of building a house over the past year.

New statistics from QV show the average cost of building a house in one of New Zealand’s main centres rose an average 2.7 per cent in the year to October. It now costs 27.4 per cent more than it did in the last peak, of 2007.

The rate of growth has slowed from 3.5 per cent in May, which QV said could reflect the impact of slower growth in Christchurch.

Auckland and Christchurch are the most expensive parts of New Zealand in which to build a house.

The report said it would cost $275,625 to build a 140sqm threebedroom home in Auckland, and $279,125 to build the same house in Christchurch.

Wellington and Hamilton had the biggest increases in building costs over the past year, up 2.1 per cent year-on-year. In both regions, the three-bedroom house would cost $261,265.

The cost does not include the land, any costs associated with building code changes, landscaping, getting power, water, gas or other connections to the building, balconies, council fees or GST.

QV costbuilder spokesman Greg Thompson said costs had increased the most – 3.2 per cent – in the large-house category, between 200 and 600sqm.

Labour costs are up 1.4 per cent year-on-year in Canterbury and 2.2 per cent for the rest of New Zealand.

It was important to remember building costs always depended on factors such as internal layout and the level of finish.

Economist Shamubeel Eaqub said the estimates seemed light. ‘‘Once you add in section, connections ... it would be a lot more.’’

Although the report looked at 140sqm houses, the average for new builds was 220sqm.