Canterbury drives $46b building boom
New Zealand's building industry will boom in the next five years with work worth about $46 billion and driven by the Christchurch recovery, BIS Shrapnel says.
Its report analysing the New Zealand construction industry as it rebounds from the global financial crisis - Building and Construction in New Zealand 2013-2018 by Adeline Wong - says that in the five years to March 2018, construction will be worth on average $9.2b a year.
The two peak years to March 2015 are expected to average about $10b each.
The $9.2b is 10 per cent higher than the five boom years to March 2008, the last peak period, when building work was worth on average $8.37b a year.
While a lot of work will be happening in Christchurch, Wong tips growth in the North Island in the next five years too.
That includes new dwellings in Auckland to accommodate fairly strong immigration, repairs to leaky buildings, earthquake strengthening of buildings, particularly in Wellington, and the building of schools.
They might add $3b to $5b at least to total building value during the five years.
In Canterbury the demolition of about 8000 red-zoned homes would boost dwelling consents, peaking between 2014 and 2015.
In addition 30,000 earthquake- damaged homes with repairs of more than $100,000 each would swell the Canterbury workload.
But even so, Wong expects fewer new homes to be built in Canterbury in the next five years than during the boom years because of the population loss and slow growth after the quakes.
She says dwelling consent numbers could be 15 per cent lower in Canterbury than in the boom March 2004 to March 2008.
Auckland's first-home buyers are tipped to settle for cheaper apartments in the inner city because of unaffordably high house prices, a similar trend to Sydney.
While BIS Shrapnel estimates Auckland is short of 9300 housing units, it sees that rising to more than 10,000 in the next two years before shrinking to 3200 dwellings by 2018.
But it does not expect as many new units - houses, flats or apartments - to be built in Auckland during the next five years as in the early 2000s because high prices will limit what can be afforded by first-home buyers.
In the non-residential buildings sector Christchurch's rebuild will boost activity.
Wong also expects a pickup in new buildings and refurbishments in warehouse, factory and office buildings in the North Island in response to economic growth in New Zealand and worldwide.
AT A GLANCE
Construction work in New Zealand is forecast to be worth $46 billion over the five years to March 2018.
Christchurch's recovery from earthquakes is the driving force.
In the North Island, economic recovery, immigration into Auckland, leaky building repairs and earthquake strengthening in Wellington will bring growth.
The $46b is 10 per cent higher than the value of the five building boom years to March 2008.
High prices for Auckland houses will force first-home buyers to go for cheaper inner-city apartments.
Fairly strong immigration will create demand for more housing in Auckland.