The average cost of building a three-bedroom home is nearly 21 percent higher than a year ago, according to Quotable Value.
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QV's CostBuilder platform, which collects information on more than 60,000 construction costs, shows double digit price increases across a range of materials and building services in the year ended April.
QV CostBuilder spokesperson and quantity surveyor Martin Bisset said "the fact that the cost of construction is increasing should surprise absolutely no-one, least of all those who are pricing and doing the work - but what is surprising is the sheer size of some of these increases, at a time when the construction industry is pretty much at capacity".
"With inflation and interest rates also rising, and supply chain issues still prevalent, there will be further price increases in the future."
The cost of stairs and balustrades were 17.4 percent higher since QV's last update at the end of 2021, due to increases in precast concrete and steel.
While trade rates for reinforcing steel (+29.2 percent), metal work (+18.2 percent), external finishes (+11.3 percent) and piling (+10.5 percent) also rose sharply in that time.
The average cost of building a non-residential building was 13.7 percent higher than a year ago.
Bisset said that it was important to note that the figures were averages across six cities and the final build cost of a home would depend on other variables, such as the finishes, layout or the size of the garage.
The steep rise in building costs over the past year had contributed to annual inflation hitting a 30-year high in the December quarter.
ANZ economists recently said they thought the residential construction sector was heading for a slowdown due to a combination of weaker demand and building supply shortages.
Demand still remains strong in pockets of the market
Christchurch-based building firm Kiwi Modular Homes was among those in the industry dealing with higher costs for skills and materials.
Director John Phillips said it was passing the costs on to customers but that had not dented demand.
"That's possibly because we also have a slightly different customer.
"Most of our customers are older, quite often they're down-sizing or they are putting another house onto their property."
They often had cash on hand to fund the build, he said.
"If we were dealing with customers who were working through banks all the time I think it would be a different story for us, because the banks are really slowing things at the moment."
Phillips thought the pace of cost increases for materials was beginning to stabilise.
Modular properties tended to be cheaper than "traditionally built homes" because they are made up of factory-built sections that were assembled at the house's final location.
Concerns for industry's outlook
Phillips said critical shortages of GIB board continued to plague the industry and warned that some firms would collapse because of it.
"If you got out to Rolleston, just out of Christchurch, you will see houses and houses sitting there almost completed... all around the outside, with the windows in, the roof on, everything's done, insulation is in and they're ready for GIB board and they've been sitting there for months.
"There are builders [who] are going to go broke."
That was because builders typically work on a progress payment system but if they were not making progress, they would not get paid, he said.
The solution to the problem was more supply, but it would take time before additional capacity was available, Phillips sid.
Price drops evident in Auckland
New Zealand's largest real estate agency said that house prices in Auckland were still falling, but not dramatically.
New data from Barfoot and Thompson shows the average selling price in May was down 1.9 percent from last month.
Managing director Peter Thompson said this indicated vendors were reassessing their price expectations.
The average selling price last month was $1.19 million - down seven percent from its peak in November.