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Building on a roll

For the first time in a single quarter building work across the country has passed $7 billion.

Thursday, September 9th 2021, 6:23AM

Statistics New Zealand’s latest quarterly survey shows the strong growth in construction work has been drivenby residential building.

The survey shows total construction work was up 2% reaching $7.214 billion of new building started in the second quarter of the year, up from the previous record of $6.74 billion in the final quarter of last year.

Residential building work was up 4.2% at $4.258 billion and non-residential work was down 1.5%, following a 4.6% rise in the first quarter of this year.

Spending on commercial projects has been easing back for some time.

Home building continues to be encouraged by low interest rates and strong capital gains, says Satish Ranchhod, Westpac senior economist.

“Increases in house building have been widespread with Auckland leading the way but sizeable gains in many other regions.

“It is off the back of low interest rates and the related strong gains in house prices.”

He expects that overall construction activity will remain strong over the year ahead.

That’s being underpinned by a large and growing pipeline of residential projects, with new dwelling consent numbers running at record highs.

The outlook for non-residential construction is mixed across segments, says Ranchhod with strength in the industrial and “big box” retailing segments and a large number of infrastructure projects planned.

However, the outlook for office and strip retailing is softer.

“While the pipeline of construction projects is strong, the pace of activity may be constrained by difficulties sourcing labour, as well as shortages of some building supplies and rising prices.”

Statistics New Zealand estimates the average delays to commercial building projects caused by level four lockdowns is about 30 working days (33 for residential), or six to seven weeks.

Some projects may now be facing delays as long as eight months.

Tags: building commercial property construction residential property

« Lockdowns don’t stop market rumbling onHousing affordability a long way off »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.85 3.25 3.55
ANZ 4.44 ▲3.39 ▲3.85 ▲4.09
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.79 ▲3.25 ▲3.49
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.85 3.25 3.55
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.85 3.25 3.55
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.45 3.85 4.15
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.45 ▲2.85 ▲3.15
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 ▲3.80 ▲4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 ▲2.95 ▲3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.99 3.39 3.59
SBS Bank Special - 2.49 2.89 3.09
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.65 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.85 ▲3.25 ▲3.49
The Co-operative Bank - Standard 4.40 ▲3.35 ▲3.75 ▲3.99
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.45 3.85 4.09
Westpac - Offset 4.59 - - -
Westpac Special - 2.85 3.25 3.49
Median 4.54 2.95 3.25 3.49

Last updated: 29 September 2021 8:51am

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