Booming construction industry needs change to meet Auckland demand

Construction will peak at $37.2 billion next year, and be worth more than $270b in the six years to 2020.
DAVID WHITE/FAIRFAX NZ

Construction will peak at $37.2 billion next year, and be worth more than $270b in the six years to 2020.

It will not be possible for a "pretty stretched" construction industry to meet the demand for Auckland housing without changing its approach, a new report has found.

But people need to think about what type of homes they want to live in as well, and quickly catch up to big city thinking.

A PWC report released Wednesday said the construction industry had become a "major contributor" to the country's economy, worth about as much as the entire Waikato region.

Construction Strategy Group chairman Geoff Hunt says New Zealanders need to think about a denser kind of living.
DAVID WHITE/FAIRFAX NZ

Construction Strategy Group chairman Geoff Hunt says New Zealanders need to think about a denser kind of living.

The report, commissioned by the Construction Strategy Group and NZ Construction Industry Council, said it was the fifth largest sector by employment, having added about 26,000 jobs between 2012 and 2015 - a fifth of all new jobs in the country.

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It said construction was expected to peak next year at $37.2 billion, and be worth more than $270b in the six years to 2020.

Construction Strategy Group chairman Geoff Hunt says the construction industry is likely to be stretched for a few years ...
SUPPLIED

Construction Strategy Group chairman Geoff Hunt says the construction industry is likely to be stretched for a few years while building peaks.

But it noted the sector would not be able to meet the demand for housing in Auckland without changing its approach.

The Proposed Auckland Unitary Plan provided development potential for 422,000 more homes in Auckland over the next 30 years.

"The approach to construction has not fundamentally changed over the last 40 years, but the nature of the demand has changed," the report said.

"Existing practices will not meet the demand challenge in Auckland."

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Construction Strategy Group chairman Geoff Hunt said more scale was needed for an industry which, at least in Auckland, was "pretty stretched".

"It's hard to see that changing," he said.

"It's going to be a longish peak."

The construction industry needed contracts to build lots of 500 to 1000 houses, rather than a small number of houses or apartments.

This would enable contractors and designers to plan the most effective way of building at a cheaper cost, he said.

"Construction costs have increased and that has slowed some of the developers down.

"I think there might be some funding constraints as well, from the banks, starting to impact some of the developers."

PWC's report, called Valuing Construction in the NZ Economy, said people also had a role to play, particularly around their housing choices.

Hunt said people liked their houses built "bespoke", which minimised the opportunities for scale through mass customisation and standardisation.

He said he was driving around Hobsonville Point in Auckland last weekend and was impressed by the streets of similar-looking terraced and joined-up houses being built there.

"That wouldn't be the type of dwelling most New Zealanders would think of living in.

"We need to change to a denser kind of living, really well-designed spaces, and a bigger emphasis on community.

"It's happened in other large cities so surely Auckland people won't take too long to catch up to that kind of thinking."

 - Stuff

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