Dreaming of building a new home? It’s a goal worth pursuing. Because you’re not just creating a space to fit your lifestyle – you’re also investing in your future.

It’s also a big financial commitment. Which means it’s important to understand what you’re up for right from the start.

So…how much does it cost to build a home today? Where do all the costs actually come from? What are your options for construction? And would buying an existing home just be easier?

Of course, every home (and home building journey) is unique. The cost of prefab homes, for example, differs from traditional. That’s why we’re going to explore the questions above, lay out the costs – and give you better insight into what’s ahead.

Build costs in 2025: what the data says

The latest Cordell Construction Index (July 2024) says the cost* of building a new home in New Zealand fell by 1.1%. Although modest, this drop does suggest some easing of pressure in the construction sector. In fact, annual building cost inflation was just 2.4% in 2023 – the lowest since 2016.

Of course, it does depend where you’re building. Overall, prices have softened slightly – but as you can see from Canstar’s July 2024 stats, many regions have actually increased.

*Figures exclude land prices, project management and fees.

Considering those industry trends, it’s now time to think more about your specific situation. Let’s run through the costs you’ll need to allow for when building a new home.

How will you build your new home?

There are 3 main approaches you can take – each with a different price tag. And, of course, no two builds are the same. Costs can vary greatly, depending on the size and location of your home, the materials you choose and the site conditions.

1. Architect-designed – generally, you’ll be charged a percentage of the total project value (often between 3%-12%). Using an architect means you can choose more bespoke designs and materials, which can increase the overall build cost. This extra complexity can also take more time in the consenting process.
2. Building companies – this approach is usually more cost-effective than using an architect because your floor plan isn’t bespoke. It’s a good option if you’d like a turnkey solution, though — like any onsite build — you still might face high labour costs and budget blowouts.
3. Prefab construction – your home is manufactured inside a factory, then connected to the foundations and services onsite. At Advance Build, you get a full-service (including design, planning, project management and construction) and a guaranteed completion date. This approach reduces your risk of delays and budget blowouts – giving you cost-certainty and peace of mind.

Whether it’s traditional or prefab there are pros and cons to consider.

Where do the costs arise?

However you end up building a home, there are certain costs you’ll need to cover. All these will differ depending on your location, the size and style of your home and the specifications you decide on.

a. Land purchase

Building a home from the ground up means buying land first – and the price you pay will depend where you’ve chosen to build. While there are no hard and fast rules, you’ll generally pay more in areas that are:

• Coastal (sea views!)
• Near large centres
• Less remote
• Highly sought-after (lifestyle plays a big part in attracting people to an area).

Consider your section

If we look at the Northland region, for example, there are certain pockets people flock to. In those, you’ll pay a higher price for your section per square metre. And, of course if you’re looking for larger landholdings – especially those with potential for farming, forestry or subdivision – you’ll end up paying a higher overall cost.

Look into zoning

The zoning of each local area will also impact land price. Each council has its own zoning regulations, which you’ll need to research before making any decisions.

Again, using the example of Northlands District Councils (Far North, Whangarei and Kaipara), it’s more expensive to buy land zoned for residential or commercial use in key growth areas, or those with development potential. But, you’ll pay less for land zoned for rural, agricultural or conservation purposes, which have stricter development controls.

We recommend speaking to a local real estate agent to get a feel for prices in your chosen area.

b. Site preparation

Not every piece of land you buy will be ready for a house. This essential groundwork is a necessary component of the overall prefab building cost – just as it is with traditional construction.

Each site is different, but expect to cover costs for:

• Land clearing
• Site excavations
• Soil removal
• Drainage
• Site access

And, if you’ve got a trickier site – say a steep or remote one – you’ll need to spend more on preparing it. Steep sites will probably need more earthworks and retaining walls, while remote ones may cost more in terms of delivery and logistics.

This is where it can pay to bring in an expert. Prefab builders like Advance Build, for example, will assess your site early on in the process and help you budget accordingly.

c. Professional reports

Generally speaking, most councils require:

• Geotechnical report
• Stormwater + wastewater report
• Surveying
• Structural engineering reports

Reports can cost between $4,000 and $8,000, depending on the particular council’s requirements, as well as the complexity of your build.

If this seems like a hassle you don’t want, you might want to think about going prefab. Many of these companies (including Advance Build) take care of paperwork like reports, as part of their project management service.

d. Consent fees

No matter where and what you’re building, you’ll need a Building Consent. Essentially, this council approval says that the work you’re doing complies with the New Zealand Building Act, the Building Code and any other regulations. These cost around $9,000*.

Some builds will also need a Resource Consent. You’ll need to seek this approval if your project has potential to impact the environment or the people within it.

As always, the price and process depends on which council you’re dealing with. At Advance Build, we liaise directly with local councils, handling all consents and permits. This takes a lot of the stress out of your building journey – and keeps it on time and on budget, too.

*Approximate costs only, based on figures from Auckland Council.

e. Site costs

No matter where you’re building, your home will need to be connected to basic services, including:

• Water
• Power
• Sewerage
• Wastewater

Your total spend will depend on:

• Whether your property already has those connections
• How close your home-to-be is to those essential services
• The amount of excavation required

Foundations also come into the equation. The cost and complexity of building these will depend on the site and its ground conditions. The soil type, for example, can affect the depth and type of foundations you need (and thereby the cost).

Other exterior costs to factor in include:

• Decks
• Stairs
• Driveways
• Base cladding
• Verandas
• Balustrade installations
• Garages

On serviced sites (those with town wastewater, drinking water, and stormwater), budget an additional $60,000–$80,000 beyond our standard price list to cover all site costs. However, for unserviced or more complex sites, that cost could increase to $80,000–$120,000.

f. Specifications

When you’re building a new home, you want to get it just right. Sometimes, that means upgrading certain elements to fit your lifestyle and needs. But these come at a cost.

Before you make any final decisions, consider whether you’d like some of these common upgrades:

• Kitchen – stone benchtops or upgraded appliances
• Bathroom – tiled wall coverings in bathrooms, level entry showers, heated towel rails
• Laundry – Customised cabinetry options

All of these (and many more) are possible – just know what you’re willing to spend first.

Building vs buying a home in 2025

Building a new home allows you to:

• Create a home that’s tailored to your lifestyle and needs – right from the start
• Incorporate modern design, better insulation and greater energy efficiency
• Spend less on ongoing repairs.

If you’re thinking about buying an existing home, it’s worth remembering that median house prices across New Zealand remain high. Also, many existing homes need significant (and expensive) renovations to meet modern energy efficiency and layout standards. And, as any home renovator will tell you, these projects can throw up a lot of unexpected costs. 

So when you think about the true cost of prefab homes (or those built using traditional methods), remember to also consider the expenses you could be avoiding down the track. 

Pondering a prefab home?

Then think about creating your dream home with Advance Build. You can look forward to a project that’s:

• Cost-certain – our transparent pricing means you know exactly what you’re up for. Fixed-price home packages are also available if required.
• High-quality – a streamlined manufacturing process means more precision and quality control checks.
• Guaranteed move-in date – without delays that can plague traditional builds, your completion date won’t budge.
• Hassle-free – leave everything to us, including council approvals, site works and compliance.
• Built by a reputable company – after 16 years in the business (and 500+ happy clients), we’ve established a trusted reputation as a team who delivers on their promises.
• Customisable – designs to suit your needs and budget.
• Less waste – to reduce your environmental footprint.
• Finance options – that take the stress out of building.

Talk to us about your building project today.