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Speaker 1: The New qv Cost Builder study shows that there has

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Speaker 1: been a huge increase to building costs over the past

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Speaker 1: four years. The study looked at the comparative cost of

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Speaker 1: a standard one hundred and fifty meter square home over

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Speaker 1: six main centers. The average increase was described as staggering.

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Speaker 1: The number is forty four percent four percent more expensive

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Speaker 1: than four years ago. Biggest increases part of the north

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Speaker 1: Tonedin and Wellington. Mike Blackburn or Blackburn Management, is a

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Speaker 1: construction analyst and joins me, Now, how are Mike.

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Speaker 2: Good morning, Andrew, how are you.

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Speaker 1: I'm good. I remember the great JIB crisis, during the

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Speaker 1: COVID and of course at supply chain crisis, but then

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Speaker 1: I thought we got over that. So where are all

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Speaker 1: these costs coming from?

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Speaker 2: Well, look, Andrew, you are absolutely correct. So because this

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Speaker 2: report does cover that four year period back to twenty

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Speaker 2: twenty one, the most of those increases would have occurred

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Speaker 2: during that twenty twenty one and twenty twenty two period. Look,

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Speaker 2: the really, really good news is is that the last

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Speaker 2: twelve months, the increase and I measure this on a

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Speaker 2: cost per square meter basis, the increase across average across

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Speaker 2: all of New Zealand is only three percent, so the

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Speaker 2: bulk of those increases occurred during that period. Now, also

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Speaker 2: bear in mind is that during that twenty twenty one

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Speaker 2: and twenty twenty two period we actually went through the

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Speaker 2: biggest building construction boom that New Zealand has ever seen.

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Speaker 2: And of course from twenty twenty two through to twenty

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Speaker 2: twenty four, building consent numbers have fallen away quite significantly.

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Speaker 2: And of course the feature of the construction industry is

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Speaker 2: that as the market gets quieter, builders merchants and builders

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Speaker 2: and developers become a lot more competitive. So we certainly

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Speaker 2: had seen a significant slow down in the increase in

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Speaker 2: the cost of building over this last two year period.

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Speaker 1: Yeah, but it's still forty four percent more expensive than

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Speaker 1: it was four or five six years ago. Someone has

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Speaker 1: to hold that cost. Now, just looking at the products

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Speaker 1: we import a lot of products. Should we do that less?

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Speaker 1: Should we be making more?

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Speaker 2: Well? Look, look, a large percentage of building materials are

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Speaker 2: manufactured here in New Zealand, or at least from raw materials.

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Speaker 2: We sort of see a lot of all the aluminium

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Speaker 2: windows are sort of assembled here in New Zealand. Obviously,

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Speaker 2: timber framing a lot of that sort of stuff. One

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Speaker 2: of the things that the proposed new government legislation is

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Speaker 2: looking at doing is looking at making it easier to

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Speaker 2: bring alternative products into New Zealand so that we're not

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Speaker 2: limited to just the handful of products that are currently

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Speaker 2: coming in. And of course all of these things will

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Speaker 2: contribute to making it easier, simpler and cheaper to build.

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Speaker 1: All right, Mike, I thank you. Mike Blackburn. He's a

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Speaker 1: management consultant business advisor, works across business companies and developers

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Speaker 1: and professionals, and each month Mike produces a variety of

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Speaker 1: detailed reports and analysis of all sorts of building cons

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Speaker 1: and activity.

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Speaker 2: For more from early edition with Ryan Bridge, listen live

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Speaker 2: to News Talk Set B from five am weekdays, or

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