Construction industry positives
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What is the main topic discussed in this episode?
do we actually see OCR increases coming back onto the table sooner than what we thought?
Kia ora and welcome to New Zealand Property Market Podcast brought to you by Cotardi for the 19th of January, 2026. I'm Head of Research, Nick Goodall, and I'm joined today as per usual by Chief of Commerce, Calvin Davidson. Calvin, we've got an update on how the debt-to-income data is being reported to run through later on. I think it's an important one to cover off after our conversation last week where we talked about the investors being close to their limits. We'll get to that later. First, let's take a look at the construction sector, starting with the Cordell Construction Cost Index, of course, the CCCI, CCCI for Q4, which was out last week. What did we report for that quarter, Kelvin, and how did the release go?
Yeah, so I mean, more of the same, really. Construction costs still relatively flat. I mean, they're going up a wee bit, but certainly not that post-COVID spike that we had. So it was a 0.9% increase in the fourth quarter of the year. This is across the cost to build a standard dwelling, I guess. This is across wages, materials, and your professional fees, dwelling consent charges, that sort of thing. So pretty standard sort of inputs. Yeah, 0.9% across the quarter, 2.3% across the year. Now, both of those are still below averages. The long run annual increase is about 4%. So yeah, 2.3%, let's call it sort of half the normal rate. So yeah, costs still going up a wee bit, but below average, the actual level of costs is a lot flatter than it was certainly after COVID where we had
sort of a 10% spike, I think was the worst point in terms of construction cost increases. So the plasterboard shortages, all of those things. So yeah, we're still seeing costs go up a little bit, but not much. And it fits with that wider downturn we've seen in the sector. know capacities opened up a little bit so it all kind of fits that costs would be flatter but yeah i guess looking ahead there's there's reasons to think it might turn around a little bit i mean we've seen the construction sector in terms of workloads start to start to grow a little bit more um interest rates are down lending rules incentivize new builds of course around the LVR and DTI limits so I think there's and the anecdotes around construction are a bit more positive too so I guess you know more activity this year builders getting a little bit busier you would anticipate that cost growth could accelerate a little bit as well but you know we're starting from a pretty low base I think maybe expectations around costs are just shift a little bit as well so you'd think it we might see a little bit more growth this year but return to that COVID spike seems pretty unlikely so yeah kind of more of the same really I think
Yeah, for sure. I think with activity, I wonder, you know, does more activity sometimes breed a bit more competition that can keep some lid on prices? Or is it more that the more activity that's happening, then it will just be more or costing more for people to build houses?
Yeah, I mean, I guess you can spin it any way you want, I suppose. But I guess, you know, in a sector where competition is heating up, maybe a bit more demand, you would anticipate that we'd see a bit more price growth. But, you know, the downturn has been been pretty deep and pretty prolonged that we're still going to be operating a bit below capacity, I think. So, yeah, a bit more cost growth. you know like i say do we see that return to to the postcode spike seems unlikely i mean think about the plasterboard shortages and all of the wage pressure we had back then you know it was a pretty crazy time so i guess just a bit more stability and i guess most people probably say that's a good thing you know allows uh home buyers to be a bit more certain about their projects that you know costs aren't going to sort of run away on them in the meantime and also builders can be more certain about quoting you know so so i guess a bit of certainty and stability is
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–3:41
2
What trends are highlighted in the construction sector?
3:41–4:43
3
How has the Cordell Construction Cost Index changed recently?
4:43–13:00
4
What factors are influencing construction costs today?
13:00–26:01
5
How is the construction activity data reflecting market recovery?
26:01–27:30
Speakers
2 identifiedMore from The NZ Property Market Podcast
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