Home News Industry News Building & Housing Short-term pain, medium-term gain

April 2025

Short-term pain, medium-term gain

07 Apr 2025, Building & Housing, Industry News, News, Regulatory

The National Construction Pipeline report, published in December 2024, has predicted short-term pain but medium-term gain for the construction industry. The report uses calendar years and actual figures from 2023 and predicted figures for 2025 and beyond

National construction activity is predicted to fall from $60.8bn in 2023 to a low of $55.1bn in 2025, before picking up slowly in 2026 to $57.2bn and rising to $63.7bn by 2029 – according to the 2024 National Construction Pipeline report.

In line with that, residential building activity was also expected to decrease from 2023’s figure of $32.9bn per annum to $28.9bn in 2025, before climbing to $35.3bn in 2029.

This reduction is, in part, driven by the forecast reduction in consent numbers over the next 12 months.  Around 200,000 dwellings are predicted to be consented during the next six years, at an average of 34,000 per year. This reduction is, in part, driven by the predicted fall in multi-unit consents – to 13,910 in 2025 from 21,563 in 2023. Multi-unit dwellings accounted for 58% of all dwellings consented in 2023. However, stand-alone dwellings consents are predicted to increase to 16,090 in 2025 from 2023’s figure of 15,675.

Meanwhile, non-residential building activity is predicted to decrease from $13.7bn per annum in 2023 to $12.5bn in 2025, before taking five years to rise to $13.3bn in 2029.

Nationwide pain

The decline in construction activity is forecast to affect the whole of the country.

“In the first four years of the forecast period (2023 – 2027), all regions are expected to see decreased levels of total construction activity in comparison to 2023. This is followed by a gradual rise toward the end of the period (Q1 2029) for Auckland, the Rest of New Zealand and Waikato/Bay of Plenty,” wrote the report.

Auckland is predicted to end Q1 2029 with $24.1bn per annum of construction activity, while Waikato/Bay of Plenty ($11.2bn) and the rest of New Zealand ($11.6bn) will also experience increases from 2023’s figures, said the report.

Canterbury is expected to have opposite fortune as construction activity is forecast to remain steady until 2027 before decreasing at the beginning of 2028 to $7.6bn. Wellington and Otago are expected to remain steady throughout the period.

Consents predicted to drop

In terms of residential building consents, all regions are expected to fall until the end of 2025.

“Auckland is the most noticeable, with consents having already fallen from 21,301 in 2022 to 15,488 in 2023 and forecast to fall further to a low of 12,960 in 2025,” said the report.

Despite the less than-favourable outlook, the report stated that builders can expect to see a similar level of work building homes in the next four years, despite declining residential consent numbers.

“Workloads are not anticipated to fall off to the same extent as consents, as the industry continues to work through the backlog of consents, potential changes to regulations around granny flats, and the continued renovations of existing housing stock.”


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