Asking what it costs to build a new house in New Zealand is like asking how long is a piece of string. It depends on many things like where you’re building it, how big your home will be and what type of materials you’ll use. Despite how much prices for new builds can differ, a ballpark figure can help you understand the average cost of a new home.
As well as the cost, there are a few other factors you should consider before you build a home, like whether it’s cheaper to buy an existing house, whether building costs are rising, what the hidden costs of building a home are and what types of homes are commonly being built in New Zealand.
At the end of 2023, inflation settled at 6%, falling from a decade-high of 7.3% in the middle of the year. During 2023 house prices hit a low in July and regained value towards the end of the year. With increasing material costs and changes to bank rates it's important to consider the short-term cost of building a house and the long-term cost of paying off the mortgage.
For many people, building a house is about more than just the cost of materials. There are definite benefits to designing and building your own home that an existing house just can’t compete with, such as:
Customisation: You get to build the home you want according to your preferences and needs. It can be easier to build a home that matches your lifestyle than find an already built home that accommodates your taste and needs.
Energy efficiency: New homes are built with the latest energy-efficient standards in mind. They often have improved insulation, efficient heating and cooling systems, and energy-saving appliances. This can lead to lower utility bills and reduced environmental impact.
Building codes and safety: Building regulations and codes evolve over time, and new homes are constructed to meet the current standards. This means they often have enhanced safety features, such as updated electrical wiring, fire-resistant materials, and better structural integrity.
Modern features: You can incorporate energy-efficient systems, smart home automation, advanced security systems, and eco-friendly materials, which may result in long-term cost savings and a more comfortable living environment.
The cost of constructing a typical 200m² brick and tile standalone home increased by 12% over 2023. Although regionally, there are varying figures across the country, only Nelson has shown a reduction in the cost of building a home in New Zealand. Some regions have seen a jump of as much as 22% in building costs, while other regions have only increased by 5%.
In 2023, the price to build a home in New Zealand was $2,820m². This is a 13% increase from the $2,541m² to build a home in New Zealand in 2021.
The cost of building a home in New Zealand differs depending on where you live. While every region has experienced increased building costs since 2023, some areas felt this increase more than others.
Building a home on the South Island is slightly cheaper, where the price is $2,982m² versus $3,208m² on the North Island.
The most expensive region to build in is Northland at $3,490m².
The most affordable region to build in is Southland at $2694m².
Northland saw the biggest increase, with the cost increasing by 22%, taking the price of a new build to $3,490m² up from $2,855m² in 2022.
Nelson saw the only decrease, with the cost decreasing by 3%, taking the price of a new build to $3,019m² down from $3,106m².
The three most expensive places to build are Otago, Northland and Wellington.
The three most affordable places to build are Taranaki, West Coast and Southland.
Costs vary from home to home, and the above averages are based on national building consent applications. As the average price per metre increases, so has the average overall price of new builds.
In 2023, the average price of a newly built home came to $442.132, a number that’s increased by 8% since 2022.
If you’re wondering why the cost of a new home overall has only risen by 8% when materials are now 13% more expensive, there’s an easy explanation.
New Zealanders are building smaller homes. Houses are around 10% smaller today than in 2020 and are around $25,380 less than homes built just a few years ago.
The size of the average home in New Zealand is 141m², down from 145m² in 2020 and down from the peak of 182m² in 2010. This is slightly smaller than the average home built in 2000 at 166m² but bigger than the average home built in 1970 (110m².)
According to Interest.co.nz figures in October 2023, the national median sale price is $674,479, a drop of 10.9% from last year. This is significantly higher than the $408,415 it takes to build your own home.
So, building a new home can be cheaper for people weighing up the pros and cons of buying versus building. However, other elements will make your new build more expensive. The following features can increase your build to $4,000m².
An elevated site
Unstable ground that requires drainage/reinforcing
Large cuts of glass that require steel portals
Open-plan living areas that require advanced engineering for support
Cantilevered decks, roofs or flooring
Sites with accessibility issues
Build methods with long-timeframes
Expect to pay $3,145m² to build a home in New Zealand. This figure will be slightly less if you’re building on the South Island (except in Nelson and Otago) and slightly more if you’re building on the North Island.
Any factors that make your site more difficult to reach or involve tricky architectural elements, like very large panes of glass, intricate roofing, or reinforcements, can push the cost of your build over $4,000m².
Despite the cost of materials, the average new build costs $442,132 in 2023, while the average existing home costs NZD$674,479.
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