Nick Smith brags about building figures

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

The 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.

Residential construction is particularly strong and the report says the boom will continue to 2021.

The Branz and Pacifecon National Construction Pipeline Report provides six-year national and regional forecasts of residential, commercial and infrastructure activity.

Figures in the report show the rate of house build was correctly projected within 1% accuracy but commercial building activity was over-estimated.

“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,” Dr Smith says.

Residential construction has been growing at more than 20% 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 minister says.

“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 building displacing Canterbury as the second-highest area of activity as its rebuild tails off.

An extra 30,300 homes are expected to be built across the Waikato and Bay of Plenty regions during the next six years.

Forecasts are showing a move toward apartment, terraced housing and townhouse consents.

In 2013, about 16% of consents were multi-unit but by last year the figure had risen to 30% and by 2021 it is projected to be 40% – 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% 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,” Dr Smith says.

He says the report confirms the government’s initiatives to rapidly increase supply  through reforms to the Resource Management Act, the new National Policy Statement on urban development, the Crown land housing initiative and Auckland Unitary Plan are working.

Get full access to the NBR Rich List 2016, released July 28, by claiming your free 30-day trial to NBR ONLINE premium content at NBR.co.nz/free