Should You Lock In Your Build Now, or Wait?

What's Really Happening to Construction Costs in 2026?

Construction costs have largely stabilized in 2026, making now a reasonable time to secure a quote if you're planning to build. Rather than trying to time the market, focus on locking in clear pricing and contract terms.

Team ConInnova

Jul 7, 2026

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Introduction

If you've been sitting on a renovation or new-build decision, you've probably heard two conflicting stories this year: "prices are spiking because of the war" and "things are finally settling down." Both are true, depending on when you look. Here's what's actually going on, and how to think about timing your project.

While construction costs have largely stabilized, factors such as material prices, fuel costs, and global supply chains continue to shape the cost of building in New Zealand.

In A Nutshell

Global tensions from the Iran conflict earlier this year rattled fuel, steel, aluminum, and copper markets hard, and those shockwaves reached New Zealand building costs through imported materials and shipping. The good news: the worst of that volatility has eased. Oil prices have fallen back to roughly where they were before the conflict began in February, as extra supply and easing demand cushioned the impact. But the situation isn't fully resolved, shipping through the Strait of Hormuz, a key route for the region's energy exports, is still recovering and remains well below pre-war levels, and negotiations between the US and Iran are ongoing rather than finished.

What this means for NZ costs specifically

Locally, the picture has actually been fairly calm compared to global headlines. QV CostBuilder's most recent quarterly data shows the average cost of building a standard 150–230m² home across the main centers rose just 1.1% over the past year, a world away from the roughly 38% cumulative increases builders saw between 2020 and 2024. That said, a few materials are creeping up again: structural timber, cladding systems, and concrete all posted quarterly increases, alongside diesel. Meanwhile, some material categories, like PVC plumbing products, actually got cheaper.

On the finance side, the Reserve Bank's recent cut to the OCR (down to 2.25%) is generally seen as supportive for building activity heading into 2026, though there's a genuine caution here too: if lower rates spark a rush of new projects and the sector doesn't have the labour and supply capacity to match, that demand surge is exactly the kind of thing that caused the cost blowouts of the early 2020s.

So… Lock in now, or wait?

There's no universally right answer, but here's the honest trade-off.

Reasons to lock in now:

Borrowing costs are currently more favorable following the OCR cut.
Underlying NZ material cost growth has been modest and predictable for the past year; you're not obviously catching a falling knife.
Timber, cladding, and concrete are trending up quarter-on-quarter; waiting doesn't guarantee those keep falling.
Locking in a fixed-price contract now protects you from further global shocks if Middle East tensions flare up again before a final peace deal is reached.

Reasons to wait or stay flexible:

Global oil and shipping costs are still normalizing, and if that continues smoothly, some imported material costs could ease further over the next couple of quarters.
If lower interest rates spark a wave of new builds nationally, that added demand could tighten capacity and push costs back up faster than the last 12 months, so "waiting for further certainty" carries its own risk
The geopolitical situation, while calmer, isn't a signed, durable peace yet, there's still a chance of renewed disruption

Our take

We generally recommend clients don't try to time global commodity markets as it's genuinely uncertain even for the analysts who do this professionally. What matters more is locking in a detailed, itemised quote with clear price-escalation terms for any materials with volatile international pricing (timber, steel, aluminium, copper-based products), so you're protected either way. If you're planning a build in the next 6–12 months, now is a reasonable time to get a firm quote in place while local cost growth remains moderate, however, ask your builder specifically how your contract handles material price movements between signing and delivery.

This post reflects the market conditions as of July 2026. Material costs and global conditions can shift quickly, talk to us for an up-to-date quote for your specific project.

References

Quotable Value. (2025, November). Building costs edge higher as timber and cladding prices rise. qv.co.nz

Cotality. (n.d.). Cordell Construction Cost Index (CCCI). cotality.com
Statistics New Zealand. (n.d.). Price indexes for the construction industry. stats.govt.nz