The cost of construction materials is rising up to 10 per cent for some products due to strong demand.
Clients of building materials and product supplier Carters in Auckland have received letters from the firm's national office in East Tamaki's Harris Rd telling them of the increases.
"We have been advised by Carter Holt Harvey Woodproducts and Claymark International of increases due to a number of factors. Carter Holt Harvey Woodproducts Laserframe and Pinex products will increase by an average of 5-8 per cent. There may be a small number of product lines which may increase by as much as 10 per cent. This increase will be effective for all products despatched on or after March 1," the letter said.
Yesterday's Consumer Price Increase showed Auckland building costs up 7.2 per cent, bucking the trend for a 0.2 per cent fall in the total index.
Carters told clients of planned price rises.
"Claymark International weatherboards, mouldings, fascia and premium decking products will increase by an average of 7-8 per cent," clients were told.
Prices of Pink Batts insulation, Greenstuf polyester insulation and commercial and industrial insulation would rise 3.5 per cent, letters said. A 5 per cent price increase was flagged for Climaflex pipe lagging and the Sisalation range which includes foil, underlays and tapes.
Troy Patchett of Parnell-headquartered property investment specialist Fuzo said the sector was facing many issues.
"Both material and labour costs are increasing," Patchett said.
New residential construction figures out this month showed record growth, praised by building and housing minister Nick Smith.
Residential building hit a record of a billion dollars of work consented in a month for the first time, he said after Statistics New Zealand building consent data was released.
"These latest figures are very encouraging and confirm the success of the Government's policies to grow housing supply," Smith said last week.
"I am particularly encouraged by the 966 new home consents in Auckland as it is getting close to the 1000 per month we need to match demand for new housing," he said.