He said that costs increased by 0.6% nationally in the June quarter, and that was in line with the 0.6% increase in March. Increases in construction costs have decreased, but that doesn't mean building a new home is cheaper, according to a real estate researcher. An incipient drop in the number of new housing authorizations could soon help ease pressure on New Zealand's residential construction sector, which has been dealing with rapidly rising costs for more than 12 months. According to the latest figures from Stats NZ, authorizations for the construction of new homes were reduced by 10% to below 46,000, easing pressure on the residential construction sector, he said.
The residential construction sector has experienced a slowdown this year, and demand for new-build housing, in particular, has declined. If so, the net result of continued increases in construction costs, albeit at a slower pace, would be greater pressure on the profit margins of construction companies, he said.
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