Key materials posted double-digit price increases
Residential construction costs in New Zealand continued to climb in the three months to the end of May, even as lower diesel prices provided some relief to fuel-intensive trades, according to the latest update from QV CostBuilder.
The online building cost platform tracked more than 11,400 material price movements across six main centres – Auckland, Hamilton, Palmerston North, Wellington, Christchurch, and Dunedin — and found that the average building cost per square metre for residential buildings rose 1.6% over the quarter and 2.4% annually.
Diesel prices fell 18.9% between the end of April and May, reducing costs in the excavation and piling trades, which recorded monthly declines of 5.1% and 0.9%, respectively.
However, a range of commonly used building materials moved in the opposite direction. Polyethylene pipework rose 25%, PVC drain, waste, and vent pipework climbed 21.6%, and cedar cladding increased 21%. PVC pressure pipework was up 18.8%, fibre-cement cladding rose 4.8%, ready-mix concrete increased 4.1%, framing timber climbed 3%, and garage doors rose 2.5%.
Diesel relief offsets only part of pressure
QV CostBuilder spokesperson and quantity surveyor Martin Bisset said the fall in diesel prices had not been sufficient to offset broader price increases.
“The reduction in diesel prices has provided some much-needed relief for fuel-intensive areas of work, but it hasn’t been enough to stop residential construction costs from rising overall,” he said.
“The steep price of fuel has obviously been the most pressing issue in recent months. 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 the overall picture remained one of modest but persistent cost growth.
“The broader picture is still one of modest cost growth overall. Some costs have come back, but materials such as concrete, timber, cladding, and pipework are still moving higher,” he said.
“Construction cost inflation is not running away right now, but it is still present. Anyone planning a build should allow for some movement in costs. Even modest increases can make a difference over the life of a project.”
Non-residential buildings, excluding educational facilities, also recorded cost increases, with the average building cost per square metre rising 1% over the quarter and 1.8% annually.
The cost pressures are emerging as the government continues to prioritise capital investment in infrastructure. Ahead of Budget 2026, the government signalled increased capital spending on schools, hospitals, energy resilience, and other infrastructure projects, even as it maintained a restrained approach to overall spending.
Overall construction activity remains subdued. According to Stats NZ, the seasonally adjusted volume of building work put in place fell 3.1% in the December 2025 quarter compared with the previous quarter, including a 1.1% decline in residential building activity. The total value of building work was $7.7 billion, down 3.6% from a year earlier.
