New Zealand’s building industry will expand at a record pace in 2014 and 2015, led by repairs and new construction after the Christchurch earthquake, according to BIS Shrapnel Pty, a Sydney-based forecaster.
The value of building will probably rise to about NZ$10 billion ($8.4 billion) a year, the forecaster said in a statement e-mailed to Bloomberg News. Construction was NZ$7 billion in the year through September 2012, according to government figures.
About 8,000 homes in Christchurch and surrounding districts require replacement after being demolished while 30,000 damaged homes need significant repair, BIS Shrapnel said. Central bank Governor Graeme Wheeler last month said the quake rebuild will start to stoke domestic demand and incomes, boosting the economic recovery.
“We expect quake-related dwelling consents to peak between 2014 and 2015 before it starts to taper off,” Adeline Wong, senior projects manager at BIS Shrapnel, said in the statement.
Still, weaker demand for housing in Canterbury, resulting from lower population growth in the aftermath of the earthquake, will keep dwelling consents about 15 percent below the annual average for the boom period of 2004 to 2008, she said.
Building in Auckland, New Zealand’s largest city, is likely to accelerate to help eliminate a shortage of homes, which is likely to be about 10,000 units over the next two years before declining, Wong said.
Auckland residential building won’t match the high levels of the early 2000s because high median house prices constrain demand from first-home buyers, she said. Prices in the city rose 12 percent in January from a year earlier, the Real Estate Institute said in a report yesterday.
To contact the reporter on this story: Tracy Withers in Wellington at firstname.lastname@example.org
To contact the editor responsible for this story: Stephanie Phang at email@example.com