Property

Building consent values skyrocket

A dramatic rise in the value of construction work last year came alongside the 48,899 building consents issued that well and truly broke 1974’s 47-year record of 40,025.

Thursday, April 07th 2022

Stats NZ data show the total value of building work consented was $29.38 billion, up $6 billion from 2019. Over the past seven years the value of building work has doubled from $14.63 billion in 2014.

In the December quarter last year alone total building value was $8.1 billion, up 17% from the December 2020 quarter. Total building volume rose 8.9% compared with the September quarter. From that residential building rose 5.2% and non-residential was up 16%.

Construction prices keep rising and in the December quarter lifted 4% for residential building and 2.2% for non-residential building, as measured by the capital goods price index.

It is not just residential construction value that is increasing. Three years ago the total value of non-residential building work consented was $7.46 billion but by last year that figure increased to $8.19 billion, up 9.8% compared to pre-Covid levels.

Much of that work is for new warehouse, storage and manufacturing facilities, while office and retail projects have fallen away because of new hybrid office working arrangements and shops under restrictions and a shift to on-line consumer spending during the pandemic lock-downs.

There has also been a surge in health and education. By the end of last year the value of hospitals and nursing homes reached a record high of $1.029 billion, up 17% of the $606 million high of 2019.

Education buidings consent values were up 37% from 2019 to hit a record high of $1.46 billiion last year.  

The volume of building is not expected to slow down over the new few years.

MBIE’s National Constrution Pipeline report released at the end of last year forecast the total value of construction work to be worth $48.3 billion in 2024.

Of all construction, residential is expected to outpce other types of building to hit a peak of $27.8 billion in 2024.

Auckland’s powerhouse residential construction already accounted for more than a third of the country’s building activity two years ago and is now expected to grow by about 11% to $19 billion by 20026.

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