Building costs are on the rise and showing no signs of slowing down.
Corelogic's Construction Price Index found prices rose 6 percent in 2021 - and it's only adding more fuel to an already red-hot housing market.
Builder Simon Duff has been run off his feet recently.
"Basically spending an hour, hour and a half, 25 phone calls, tracking down said materials," Duff says.
He's been in the industry for 25 years, and says he's never seen anything like it.
"We just heard the other day that GIB, there is a four-month delay - it's a crazy time to be in the business," Duff says.
Corelogic's Construction Cost Index has found prices are rising at the fastest pace in almost four years thanks to COVID-related supply issues, timber prices and record consents.
Building costs rose 6.1 percent in 2021 and those doing the mahi say that may be conservative.
"Certainly if you talk to anyone in the industry, they all say, well 6 percent is quite low. The cost rises they are actually seeing from suppliers are a lot higher," Corelogic Chief property economist Kelvin Davidson says.
Davidson believes the only way is up.
"This won't be the peak, I think we could easily see 10 percent growth in construction costs as we get through these next few quarters, and possibly stay there for a while," he says.
To combat this, Duff's now asking clients to factor in at least a 20 percent price hike by the time a project is complete.
"You can't even offer anyone fixed quote anymore. Fixed quotes are almost out the door, because every two months there is going to be a price hike," Duff says.
Real estate education company Property Apprentice is now advising its clients not to buy new because of the exploding costs.
"You just have to be careful with the deals you're entering into. And I'm not saying all new builds are bad either, you just need to make sure you've got finance sorted before you enter into that contract," Property Apprentice investment coach Debbie Roberts says.
Construction costs leaving builders and prospective buyers banging their heads against a very expensive wall.
