The Stabilisation
QV CostBuilder’s quarterly update reports that the average building cost per square metre for residential construction increased 0.3 percent in the most recent quarter — identical to the rate recorded in both the February and May quarters of the same year. Three consecutive quarters of the same marginal increase represents the most stable construction cost environment since before the COVID-19 pandemic disrupted supply chains, labour markets, and materials pricing in ways that produced the extraordinary cost volatility of 2021-2023.
QV CostBuilder spokesperson Simon Petersen framed the significance directly: “This is good news for anyone looking to build right now, as it will give them more confidence that the estimated cost of a project will indeed be in the same ballpark.” Predictable cost escalation — even at current absolute levels — is operationally valuable for builders pricing projects and clients planning budgets. The alternative — the 10-30 percent annual cost inflation of the pandemic period — made project viability calculations almost impossible to maintain from quote to completion.
What Is Moving Within the Average
The overall residential cost stability masks movement within individual cost elements. Interior doors and sanitary plumbing recorded the largest increases. Steel framing costs fell 5.7 percent — a meaningful reduction in an important structural element. Suspended ceiling costs dropped 4.5 percent. For non-residential buildings, average costs per square metre increased 0.2 percent. Trade rates rose 0.2 percent overall, with hardware and demolition costs up 2.9 and 1.4 percent respectively.
The steel framing reduction is worth noting specifically: steel framing has been under sustained price pressure from elevated import costs and supply concentration. A 5.7 percent quarterly reduction provides genuine benefit for multi-unit and commercial projects where structural steel represents a significant cost line.
The Risk Horizon
Petersen acknowledges that the stability picture is not without risk: “There is still an abundance of economic and geo-political uncertainty that has the potential to impact construction costs moving forward. This includes the possible escalation of conflicts in the Middle East and Ukraine, which could affect global supply chains.” For builders operating with fixed-price contracts over extended project timelines, the current stability provides a healthier buffer than existed at any point between 2021 and 2023 — but the prudent approach remains identifying material procurement lead times and considering forward purchasing for major items where supply chain disruption risk remains elevated.
