WhattheDropinConstructionPricesMeansforNZ'sPropertySector

For the first time in 12 years, New Zealand has seen a drop in construction prices, with the Cordell Construction Cost Index reporting a 1.1% decrease in the last quarter. This reduction is a welcome development for the property sector, which has been grappling with high costs amidst a broader economic slowdown.

Whilst too early to say (but long overdue) the decline in construction costs may alleviate some financial pressure on developers. Lower construction costs, coupled with government initiatives to increase housing supply, could create a more balanced property market.

However, the sustainability of this price drop is uncertain. Factors such as global supply chain stability and local economic conditions will play a crucial role in determining whether this trend continues. Developers should remain cautiously optimistic, leveraging this opportunity to push for more efficient and cost-effective construction practices.

The drop in construction prices is a positive sign for New Zealand's property sector, offering a potential boost to housing affordability and development. Continued vigilance around costs and strategic planning will be essential to maximise the benefits into your next development.