One of the most pressing worries we hear from our Landmark customers is they are concerned about the rising cost associated with building a new home. While rising inflation and increasing prices across the board cannot be denied, the facts are no one in the New Zealand or global economy has been immune to these pressures.
When it comes to building a new home, inflation has risen steadily since 2014. CoreLogic NZ's Cordell Construction Cost Index (CCCI) report notes that in 2022 the acceleration of new home builds coupled with New Zealand's ongoing labour shortage, building material supply issues and project delays have all contributed to the 10.4% increase in the cost of building a residential home.
From August 2021 to January 2022, there was a 19% increase in the cost of building materials to suppliers, with one of the biggest influences on construction-related building costs being driven heavily by the cost of timber.
When building a new home, people may not realise that many building materials or components are sourced offshore. This is felt in the materials themselves and the increased shipping costs. Unfortunately, the rest of the world is also struggling with the impact of inflation and economic uncertainty, which has a flow-on effect on the cost of building materials in New Zealand.
And while this may sound bad for building, the opposite is true.
We would love to say that as the post-pandemic ship continues to steady, building costs and the price of materials will start to come down, but as MBIE's Building and construction sector trends show, prices are only set to increase, so if you are looking to build a new home, there isn't going to be a better or cheaper time than right now.