Kelvin Davidson

On balance, you probably think an official cash rate increase is coming sooner than what was previously thought.

Yeah, I mean, six of one, half dozen of the other in some ways.

There was a bit of an acceleration in cost growth, and that was kind of a headline that was picked up by media, but...

the thing i also said to them which some stories left off was that it's still very low so yeah it's turning around a little bit but cost growth is still very low so in the first quarter of the year we saw one percent increase in the cost to build a fairly standard three bedroom two bathroom i think it's brick and tile single story dwelling there's a big long definition but

Think of it as a standard house, went up about 1% in the first quarter and up 3% from this time last year.

So yeah, that was a wee bit of an acceleration from where it's been over the past sort of two to three years.

But the annual growth rate on average going back to 2012 has been 4%.

So we're currently sitting at 3%, the average is 4%.

You know, a wee bit faster than it has been, but still below that average.

So I think really you'd still say that the cost growth is relatively controlled and fits with...

big downturn that we've had in the construction industry there's still some capacity out there you know obviously some builders have done it pretty tough so those those costs are are definitely flatter our index is about 50% materials 40% wages and 10% other stuff professional fees consenting that sort of thing so

So that kind of gives you an insight into how the index is made up or how it's comprised.

So materials do play a big role, but wages are a big part of it too.

And wages in the building industry, I guess, are fairly flat at the moment too.

So it all adds up to a fairly controlled picture.

I guess in terms of different items, there was a bit of a lift in masonry bricks.

A 12% rise we recorded in the first quarter, 5% for wallpaper.

I don't actually know how many people use wallpaper anymore, but obviously it's still a used product.

4% for LED lighting, so those were some things that were up, but also there were things that went down.

Plumbing related products, PVC piping, bathroom fit outs.