Pandemic price surges fade, materials and wages stabilise
After one of the most turbulent decades in New Zealand’s construction history, the cost of building has finally stabilised. According to QV CostBuilder, construction costs have flattened since 2023, with annual increases now around 1% in 2025.
QV national cost consultant Martin Bisset said the industry had moved on from the steep price surges seen during the pandemic.
“We’ve seen the cost of construction flatten out since 2023, with annual increases back down around 1% in 2025,” Bisset said. “The past decade included dramatic spikes – particularly through 2021–2022 when global supply chains were disrupted and material costs soared.”
Fresh data from Cordell’s latest Construction Cost Index (CCCI) reinforces that trend, with construction costs rising just 0.4% in the September quarter – down from 0.6% in Q2 and well below the 1% long-term average. Annual growth eased to 2%, from 2.7% previously.
Cotality chief property economist Kelvin Davidson said the moderation shows “a market that has largely moved past the extreme post-COVID cost pressures of 2021-22.” He added: “Materials are better supplied, wage growth has steadied, and we’re seeing more predictability in project pricing.”
Some materials still outpacing inflation
While overall construction costs have eased, several materials remain well above pre-pandemic levels:
- Cedar weatherboards rose from $17 per metre in 2015 to $64 in 2022, before easing to $53 this year.
- Shadowclad exterior plywood is up 110%, windows 72%, and steel sheet roofing 76%.
- Radiata pine clear flooring surged 122%, while carpet and ready-mix concrete rose 41% and 43% respectively.
- Radiata pine framing is up 45%, and plywood saw the smallest rise at 12%.
- Construction labour costs increased about 35%, slightly outpacing CPI.
Cordell’s data shows a sector finding stability, with plumbing costs up 7% in Q3, gas products up 2%, while bathroom fittings fell 6% and roof tiles and joinery stayed flat, Davidson said.
Non-residential building costs (excluding education) climbed 42% over the decade — less than residential growth.
Affordability gap widens
Despite slowing inflation in materials, housing affordability remains under pressure.
Despite slower cost growth, housing affordability remains stretched, with many New Zealand salaries rising less than 33% over the past decade — well behind construction and living costs.
Bisset said the past decade has tested the industry’s resilience, with consistent cost tracking helping professionals manage through volatile periods.
Davidson said the recent easing in cost growth and improving access to finance suggest a steadier pipeline of new projects through 2026.
CostBuilder marks 10 years of industry data
This year marks a decade since the launch of QV CostBuilder, the country’s most comprehensive subscription-based building-cost platform, powered by state-owned enterprise Quotable Value (QV).
The tool now tracks over 61,000 rates and 18,000+ material and installer prices, updated monthly to support builders, quantity surveyors, architects, valuers, students, and councils.
Over ten years, QV CostBuilder has updated more than 439,000 individual costs, saving users thousands of hours of research time.
To celebrate its 10-year milestone, QV CostBuilder is offering $50 off new subscriptions for those who sign up by Nov. 14 using the promo code COUNT-ME-IN at costbuilder.qv.co.nz. T&Cs apply.
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