Building a house gets dearer
The Dominion Post | Thursday, 17 May 2007
The cost of building a house continues to rise, with figures showing an increase of 1 per cent in the March quarter and 5.1 per cent for the year as wages and material costs keep going up.
The price of timber has risen about 10 per cent recently, due to higher international demand. This has fed through into the cost of building a home. Higher wages are also playing a significant part in the rising costs, industry representatives say.
The wider construction industry is also facing higher costs, up 4.1 per cent in the past year because of rising costs in concrete work and steel and iron materials.
According to Statistics New Zealand figures, the capital goods index was up 0.4 per cent in the quarter and 3.7 per cent for the year because of the higher building costs.
Master Builders Federation chief executive Pieter Burghout said labour rates were rising as the industry struggled to attract enough workers to meet demand.
"Employers are competing for good skilled staff," he said. This shortage pushed up wages, in turn pushing up prices.
The shortage of skilled workers was the result of there being few apprenticeships in the 1990s, when the building sector slumped.
"We now have 10,000 apprentices in the system and though we have had labour shortages in the past five years, the people in training will help solve that problem in the next five to 10 years."
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