Report forecasts positive outlook for homebuilding activity

New Zealand's homebuilding and non-residential construction pipeline is forecast to return to 'normal' levels following an extraordinary building boom during the pandemic.

“Overall activity in the sector is forecast to experience a short-term decrease, returning to levels similar to 2020, and remain steady at that level before increasing from 2028,” according to the latest edition of the annual National Construction Pipeline Report, which is published by the Ministry of Business, Innovation and Employment (MBIE).

“The number of building consents issued in the last year suggest we have passed the unprecedented post-covid demand and are realigning with more usual levels of fluctuations.”

More than 200,000 homes are forecast to be consented between 2022 and 2028, almost half of them multi-unit dwellings.

MBIE's Manager of System Strategy and Performance, Micheal Warren, said the overall construction outlook was positive.

“Residential building activity is forecast to return to levels that align with the sector’s capacity to deliver buildings ready for occupation, settling the sector into a more sustainable level where supply and demand is much closer than it has been in recent years,” he said.


Plenty of infrastructure in the pipeline

Meanwhile, the report also said New Zealand had a strong pipeline of infrastructure projects.

“The report forecasts the value of infrastructure building activity to steadily increase to a new high in 2026 and remain steady at that new level, largely driven by the extreme weather rebuild and increasing resilience throughout the country,” the report said.

“Nearly all of the infrastructure projects expected to start in the next year are transport, water and subdivision activities.”

Furthermore, non-residential building activity is expected to reach “a modest high” in 2024, and remain steady and consistent throughout the remainder of the forecast period.

“Commercial, education and health building activities make up three-quarters of non-residential projects expected to start in the next year,” the report added.

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Published: 26/2/2024