Record house build and construction under way

Building activity is at record levels nationwide and is forecast to continue to boom in the latest National Construction Pipeline Report, Building and Housing Minister Dr Nick Smith says.

“This report shows annual construction activity across New Zealand has topped $31 billion, an all-time high, and is projected to reach $37 billion in 2017. The report shows residential construction is particularly strong and forecasts construction activity to remain stronger for longer as compared to last year’s report, with the boom continuing to 2021.

The latest National Construction Pipeline Report provides six-year national and regional forecasts of residential, commercial and infrastructure activity. The report is produced independently by BRANZ and Pacifecon to help the industry in planning and recruitment. The latest report shows the rate of house build was correctly projected within 1 per cent accuracy but that the commercial building activity was over-estimated. The methodology is being revised constantly to improve projections.

“The growth in residential activity in Auckland is particularly encouraging as it forecasts that next year more homes will be built in Auckland than ever before. Residential construction has been growing at more than 20 per cent a year in Auckland for the past five years and is projected to reach an all-time high of 13,332 homes in 2017, and to stay at those record levels until 2022. This equates to 34,500 homes in Auckland being built during this term of Parliament and another 39,831 in the next term. The scale of this growth is unprecedented and equates to Auckland growing by the equivalent of Whangarei every three years.

“The report forecasts particularly strong growth in Waikato and Bay of Plenty, with residential activity displacing Canterbury as the second-highest area of activity as its rebuild tails off. An extra 30,300 homes are forecast to be built across the Waikato and Bay of Plenty regions during the next six years.

“Forecasts are showing a move towards multi-unit consents, such as apartments, terraced housing and townhouses. In 2013, about 16 per cent of consents were multi-unit but by 2015 the figure was 30 per cent and by 2021 it is projected to be 40 per cent – more than one in every three of all consents nationally. The report also identifies a sharp increase in retirement village units to 1900 per year – more than double the historic norm and taking them to 6 per cent of new homes.

“Reliable forecasting such as this is a powerful and transparent planning tool which offers more detail for the industry, the training sector and the workforce to smooth some of the pressure points and contribute to our overall building productivity.

“This report confirms the Government’s initiatives to rapidly grow supply are working. We will need to maintain the momentum of our comprehensive housing plan, including reforms to the Resource Management Act, the new National Policy Statement on Urban Development, the Crown land housing initiative, the housing infrastructure fund and the Auckland Unitary Plan, as well as the new initiatives on an Urban Development Authority, unit titles reform and building regulations reform to support this construction boom.”

The National Construction Pipeline Report 2016 is available at www.mbie.govt.nz