By Martin Bisset (MNZIQS, Reg. QS)
We all know that construction prices have moved considerably in the last 10 years, but I often get asked what has happened in the last couple of years.
Our QV costbuilder index for this quarter has shown that building costs have increased greater than the Consumer Price Index (CPI) over the past few years (current CPI is 0.4% to June 2015).
We have seen a range of variations across building types and regions. The largest average percentage increase experienced has been seen with residential builds. The QV costbuilder index shows that in the last two years residential building costs has increased 4.3% and in the last 12 months costs has gone up 2.1%. This is expected, especially when considering the amount of new homes constructed in the past couple of years. The Christchurch rebuild, positive migration, low interest rates, and loan to value ratio rules have all influenced the residential property market and people building their dream homes.
When you look at other building types there is a similar trend. The average cost of building a warehouse has increased 3.7% in the last two years, and has increased 1.5% in the last year. The average cost of building a hospital has increased 3.2% in the last two years and increased 0.9% in the last year. And the average cost of building a school has increased 3.6% over the last two years and increased 1.3% in the last year.
There are regional differences across the board. The cost of building a school or a hospital in Auckland has increased 5.3% and 4.7%, respectively, in the last two years. This is in contrast to Dunedin, which has only increased 1.1% for schools and 0.9% for hospitals in the last two years. All of which is due to price variations that are experienced around the country.
This means using the most up to date and correct information is imperative in any work relating to whatever construction you are involved with.
QV costbuilder is a new online subscription platform that enables anyone in the property and construction industries to access the latest construction cost data from any device. It provides you access to the latest building costs per square metre; elemental costs of a building; cost planning rates; detailed trade rates; plus labour constants and construction indices across six locations (Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin). As a Registered Quantity Surveyor with close industry links, I manage the QV costbuilder data to ensure you have the credible and relevant building cost information available.
To find out more about QV costbuilder or to purchase a subscription visit qvcostbuilder.co.nz.