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Building boom looms

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Nov. 05 / 2014

Building boom: Mayor Len Brown pours concrete at the Fairway Bay Development. Top Harbour chief executive Sean Pan helps while Fairway Bay Development consultant Michael Webb-Speight, centre rear, is ready to step in if required.

A $100 billion national building boom is forecast during the next three years.

That includes developments throughout Rodney and the Hibiscus Coast.

It’s the biggest in decades, with a minimum 10 per cent increase in activity every year to 2017, reaching a value of $35 billion, Building and Housing Minister Dr Nick Smith says. ‘‘We are looking at the longest sustained period of growth in construction activity in 40 years.’’ The latest findings in the second National Construction Pipeline report support similar projections made in the first in December.

The new report predicts slightly greater construction activity this year, and a lower peak in 2017 with the boom peaking later in Auckland in 2018.

‘‘Auckland shows the highest level of construction activity, accounting for more than one-third of the upcoming workload in terms of value,’’ Smith says.

Residential building is the driver, with the value expected to more than double between 2012 and 2017.

Smith says this affirms the success of the Government’s Housing Accord with the Auckland Council, where thousands of homes will be built in the next few years.

Key development areas include Millwater/Silverdale, Gulf Harbour, HuapaiKumeu, Riverhead and Hobsonville Pt.

Latest Statistics New Zealand figures show strong annual growth in the number of building consents with 24,046 issued across the country in the year to September 2014. This is a sixyear high, and reflects an increase of 22 per cent on the same period last year, Smith says.

Auckland’s building consents rate are at an eightyear high, with 7320 consents issued in the year to September 2014 – 30 per cent more than the previous year.

The National Construction Pipeline provides national and regional forecasts of activity for residential and non-residential building and construction by central and local government, as well as the private sector.

BUILDERS HAVE HIGH EXPECTATIONS

Millwater marketing manager Warren Frogley: One of New Zealand’s largest residential developments will have more than 3000 dwellings completed by about 2019, a mix of medium to high density housing.

It has been the stimulus for the Silverdale Retail Centre expansion including The Warehouse, Countdown and 36 other shops.

Millwater has also been central to improved amenities, such as UFB fibre internet, increased water service, parks and sports grounds, and new or improved infrastructure such as the State Highway 1/Wainui Rd interchange, due for completion early next year.

GJ Gardner Homes operations director Mike Fraser: Builders and tradesmen will benefit from this projected escalation in building activity. The flow down affect to all the local businesses and communities will be substantial as well.

There may be some challenges in terms of the availability of resources and suitably skilled trades staff to complete this work. But what a great problem to have when you compare it to not having enough work.

All GJ Gardner franchises throughout Auckland are extremely busy but are working to cope with this growing demand.

Cranston Homes managing director Blair Cranston: Predictions of increased activity need to be tempered with the construction industry’s ability and capability to produce at those increased levels. We are already confronted with a severe manpower and skills shortage. This shortage is harming productivity because construction firms are unable to start projects quickly and complete them in a timely manner.

Land availability will continue to be a challenge, and increasing costs to produce sections will drive prices up.

I have a deep concern that the residential sector is steadily pricing itself out of reach of our next generation of house buyers.

Fairway Bay project consultant Michael WebbSpeight: On the Whangaparaoa Peninsula there are 1000 homes being built in Fairway Bay and another 1000 homes between there and Red Beach. Constraints in the supply chain affecting timeframes and costs have already been noticed. We are seeing delays at key points. Engineering seems to have been an issue over the last six months, with up to six weeks taken to process relatively simple floor slab designs.

Shortages in key trades will undoubtedly cause issues within building projects. Fairway Bay has more than 30 homes in design or construction, and it will be eight months before some of those homes will be ready for families. Those purchasers buying now will have the benefit of avoiding the price increases that inevitably come with resource constraints.

Certified Builders Association Auckland board of directors’ Dave Whitehead: Now is the perfect time for young people to get into the industry. The changing landscape due to licensing and new contract laws require a new level of professionalism and organisation which, as an association, we happily embrace.

The boom and bust cycle continues to worry those in the industry but it is good to see the government is aware of this and endeavouring to overcome it.

It is important mistakes from the past are not repeated and that every build is a quality build. To achieve this it is important that we have trade qualified carpenters with the appropriate contracts, and guarantees/warranties/ insurances in place.

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