The current boom in the building and construction sector in New Zealand is set to continue amid healthy levels of economic and population growth, according to the latest forecasts, with the housing sector particularly in Auckland and the Christchurch rebuild to continue to drive momentum going forward.
In its latest forecasts covering the five years to 2020, industry research firm BIS Shrapnel says it expects the overall dollar value of building work put in place throughout the country to peak at around current levels of around NZ$14 billion and before easing back to around NZ$12-$13 billion in over the remainder of the forecast period.
By comparison, the industry failed to reach even NZ$10 billion worth of activity as recently as calendar 2011 before the Christchurch rebuild kicked into gear.
BIS Shrapnel Senior Project Manager Adeline Wong said strong conditions will be primarily underpinned by strong activity in new housing construction and renovations – especially in Auckland amid strong growth there but also in Christchurch.
“This [boost in activity] will help drive total dwelling authorisation value to record highs of an estimated annual average of NZ$8.4 billion in real terms, compared to the previous high of NZ$6.1 billion over the period from 2000 to 2005,” Ms. Wong said, according to The Urban Developer.
Aside from the Christchurch rebuild – which by itself has accounted for more almost NZ$2.5 billion worth of building consents issued across 8,575 residential and non-residential buildings since September 2010 – the current boom in the New Zealand building sector is being helped along by a reasonably strong economy as well as high levels of migration.
A publication released on Tuesday from the country’s national statistics agency shows that at 1.52 percent per annum, the country’s rate of population growth is faster by a long shot compared with peers such as Australia, China, the United States, the United Kingdom and Germany.
All this has policy makers scrambling to release new land and beef up housing construction and supply – especially in Auckland, where the government wants to create 39,000 new homes under an agreement with Auckland City Council as a severe shortage of available housing has seen median house prices surge from around NZ$550,000 to almost NZ$750,000 in just over two years.
Outside of housing, meanwhile, BIS says it expects an upturn in new building and refurbishment activity across the office, retail and educational building sectors on the North Island.