The building industry continues to boom with just under $5 billion of new building work put in place in the second quarter of this year, according to Statistics NZ.
There was an estimated $3.121 billion of residential building work commenced in the second quarter of this year and another $1.797 billion of non-residential work. That took the total value of all building work commenced in the quarter to an all time high of $4.918 billion, up 21.1% compared to the second quarter of last year.
Auckland continues to be the driving force of the building industry, accounting for $1.828 billion of new work in the second quarter (37.2%), followed by Canterbury with $1.158 billion (23.6%).
The only region to record a decline in new building work in the second quarter was Wellington with $314 million, down 8.1% compared to the second quarter of last year.
However while the value of building work being undertaken is increasing at a respectable clip, its does not appear to be increasing employment in the sector.
Statistics NZ also estimates that the building industry generated 5.235 million hours of paid work a week in the second quarter of this year, equivalent to 130,875 people working 40 hour weeks.
But that figure has been remarkably flat since the fourth quarter of last year when it generated an estimated 5.242 million hours of paid work, equivalent to 131,050 people working 40 hour weeks.
That suggests that much of the increase in the value of building work being undertaken could be due to inflationary pressures within the construction industry, or a skew to more expensive projects at the expense of more affordable ones.
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9 Comments
be surprised if this lasts beyond 12 months - construction work will be based on lending decisions made 12-24 months ago. my understanding is that the banks have pulled back big time and are only approving 1 out of 10 props for large scale developments since the rbnz ramped up the lvr restrictions
this in todays nz herald
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…
No. For commercial work there was a major spike in design work at the start of the year, and there is the typical heavy workload from mid-year onwards. A big part of that figure for commercial work will be from the sudden surge of approvals at the end of last year and the start of this year.
I'm not seeing any slow down.
A wide range of work passes through my hands. Small through to large there's still plenty going on. If the banks actually lower there rates again there would be more projects that get finance approval but finance is not the only hold up in the pipeline. Bottlenecks are forming elsewhere such as purchase of land or existing buildings, and there are a lot of people tied up with large projects.
you're missing the point - funding for most apartment developments is commercial - the end buyer is more than often an investor. secondly risk increases as you move further from the city centre. thirdly when making a decision on a big development when the lag could be 2-3 years the funder carries risk when it comes time to settle. many investors may very well choose to forgo the deposit and walk away. leaving the lender and developer with a massive problem.
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