NZ Construction Boom Tipped for next Six Years 1

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Thursday, July 30th, 2015
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An “unprecedented” level of building work is predicted over the coming six years, due largely to Auckland’s housing boom, a new report says.

Building and Housing Minister Nick Smith heralded the latest National Construction Pipeline Report as confirming the nation is “building more than we have ever before” with $209.4 billion of work projected over the next six years, peaking in 2016 at $36.5 billion of work.

The Ministry of Business, Innovation and Employment-commissioned report showed Auckland building activity will peak in 2018 at $16.3 billion, of which about 60 per cent will be residential work.

The value of residential work is expected to grow 22 per cent over that period, while non-residential building is expected to rise by 17 per cent.

“Today’s report points to a golden era for New Zealand’s building and construction industry,” Dr Smith said.

“The challenge for government is to ensure we have the skills and capacity to meet the demands of this growth, and that the regulatory measures are in place so that quality is not compromised for quantity during this period of unprecedented growth.”

The report, prepared by Building Research Association of New Zealand and Pacifecon, said while the value of construction will reach a higher peak than ever before it is not expected to result in a higher number of dwellings than ever before due to more expensive costs per dwelling.

The report’s authors said the primary driver for more expensive dwellings was an increase in cost per square metre built.

It estimates 94,400 new dwelling consents will be issued in Auckland between January 2013 and December 2020, of which 53,500 will be detached homes.

Some $51.8 billion of residential work is expected between 2015 and 2020, almost half the $109.3 billion of residential work predicted across the country.

 

By Paul McBeth
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  1. Tim Johnson

    Based on current market forecasts, this might be the time when Australia starts to experience a bit of a dip as the sky-high levels of building activity in residential eases back.

    What a wonderful opportunity this will represent for builders in Australia as well as New Zealand itself to capitalise on a booming market.