Auckland construction boom to peak in 2018

With a widely reported housing shortage in Auckland, it’s expected the city will drive record construction growth, while the regions stall

Driven by the Auckland housing market, the value of building and construction is set to hit record levels by 2020, according to the latest National Construction Pipeline report.

BRANZ and Pacifecon – a construction industry data analysis specialist – produced the report based on current and forecast data, on behalf of the Building and Construction Productivity Partnership, which is part of MBIE.

The report predicts that the annual value of all building activity across the country will increase by 19% from 2013 to 2020, a 22% increase in residential building and 17% in non-residential building.

For the three years to the end of 2017, the total spend on all construction is forecast to be $106bn, peaking in 2016 with an annual spend of more than $36bn.

Auckland peak: 2018

By value, Auckland currently accounts for more than a third of all building and construction work across the country. It’s expected to peak in 2018, increasing by 78% to $16.3bn compared to 2013. Between January 2013 and December 2020, it is forecast 94,400 new dwellings will be consented in Auckland.

The value of residential construction is expected to increase 126% to $9.6bn in 2018, accounting for approximately 60% of all building and construction in the region. Offsetting the increase in value is the rising cost of construction, which means fewer homes are being built for the same amount of money as in the past.

Christchurch peak: 2016

The Christchurch rebuild has driven strong building and construction activity over the past few years, but it is expected to peak in 2016, with $8.2bn of total work.

The report says residential construction in the city will fall away after 2017, with non-residential construction expected to drop below all other regions in 2020.

Waikato/Bop set to grow, other regions stagnant

The value of all building and construction in the Waikato and Bay of Plenty is forecast to peak in 2018 ($5.6bn) before plateauing in 2019 and 2020. Steady growth in non-residential work is projected over the forecast period, rising 32% from 2014 to a $3.2bn peak in 2018.

In Wellington, all building and construction is forecast to increase by 6% from 2013 to 2020.

Combined, the annual value of all building and construction in the rest of New Zealand is about the same at the end of the forecast period as at the beginning.

Residential building is forecast to rise by $0.3bn from $2.7bn in 2013, to a plateau of $3bn in 2017 and 2018, and then fall back to $2.5bn by 2020. The value of non-residential building and construction is forecast to increase by 24% from $2.9bn in 2013 to $3.6bn in 2016, before falling back to $3.4bn in 2020.

Main image: By value, Auckland currently accounts for more than a third of all building and construction work across the country