5th National Construction Pipeline Report 2017 – now released

The National Construction Pipeline report provides a forward view of national construction activity for the next six years, ending on 31 December 2022. It includes graphs, tables and commentary on actual and future building and construction work, based on building and construction forecasting by BRANZ, and Pacifecon data on known non-residential building and infrastructure intentions.

Click here to see more information and download your copy of the report

LAND/HOUSE - Where will we build?

Under Auckland's Housing Accord, 154 areas were established as part of the fast-track Special Housing Areas to speed up building tens of thousands of houses. However, more than half no longer exist. The Unitary Plan is planning for 1 million more people and 400,000 new dwellings over the next 30 years.

The latest Colliers International Auckland Residential Development Report found the highest number of apartment completions in more than a decade, is expected this year.

The Government will borrow $1.1b through a domestic bond issue to help fund 34,000 new social, affordable market homes in Auckland. 13,500 to be social housing and 20,600 for the open market.

Hamilton is experiencing rapid growth in demand for housing from single people, couples and small families. About 70% of the people on the social housing register for Hamilton, needed a one or two-bedroom home. A $12 m Housing programme will allow Housing NZ to make better use of its land.

Mayor Mr Lester, Wellington: land is released to the market too slowly, may lead to penalty systems.

Government plan a spend of $50m for 145 one-bedroom units across 5 sites in Wellington. An additional $75m to build and refurbish 700 houses in the Hutt Valley over 5 years.

3 Consortia short-listed to buy 2,500 Housing NZ properties in Christchurch. The successful bidder must keep as social housing.

More than 2,800 residential units could be built along Ladies Mile, near Queenstown. The council's plan covers an area of 136ha and includes the under-construction Queenstown Country Club (QCC).

INFRASTRUCTURE – Yes- we need this!

The Mayoral Housing Taskforce has produced a report acknowledging problems facing Auckland’s housing crisis. The report makes recommendations in 3 key areas: developing at scale, which includes building through recessionary dips; unlocking the availability of land with appropriate zoning and infrastructure; and enabling efficiency and innovation in consenting and risk management.

The $1 billion Housing Infrastructure Fund for network roading and water infrastructure has however been allocated across 9 projects in 5 different council areas as below.

Auckland Council - $300m (10,500 houses) Whenuapai & Redhills	Tauranga City Council - $230m (35,000 houses) Te Tumu (eastern end of Papamoa)
Hamilton Council - $272m (8,100 houses) Peacockes southern edge of Hamilton	Te Maunga Wastewater Treatment Plant capacity upgrade & new (Waiari) water treatment
Waikato District Council - $37m (2,600 houses) Te Kauwhata (shore of Lake Waikare)	Queenstown - $50m (3,200 houses) Frankton Flats sites (Quail Rise South and Ladies Mile) and an extension of the Kingston township

New infrastructure has $4 billion committed by government. This includes $1 billion to repair quake-damaged Kaikoura, $812m for repairing damaged sections of State Highway 1 between Picton and Christchurch. Roads throughout the country will also get a spruce-up, with $9 billion committed over the next four years. Of that, $1.43 billion will come from public-private partnerships, to build Transmission Gully and the Pūhoi to Warkworth routes. New Zealand’s rail network will receive $548m for upgrades.

The Northern Corridor Improvements (final motorway connection for the Western Ring route project in Auckland) hearings have concluded. 33 submissions were made.

CPB (formerly Leighton Holdings), was awarded the contract to deliver the design/build of State Highway 2 Baypark-to-Bayfair link upgrade in Tauranga. Total cost $120 m.

Watercare ditched plans for a $300 m-plus water treatment plant at Oratia. The board has decided to build a new plant alongside the existing Huia water treatment plant at Titirangi.

Tourism infrastructure boosted by $102m for new car parks, toilets, and freedom camping facilities, alongside $76 m for Department of Conservation to develop tourist facilities on conservation land.

More than 75% of phase one of the government’s Ultra-Fast Broadband (UFB) programme is complete.

A coalition of rural ISPs (WISPA) has confirmed its members have bid for the Rural Broadband Initiative 2 tender: $100m internet improvements and $50m fixing cell phone blackspots in remote areas.

A new $100 m trans-Tasman underwater cable has been completed. Spark NZ, Vodafone NZ and Telstra built the cable in late 2014. The 2,288-kilometre link between Raglan and Sydney is open for business.

Tauranga's 19 km cycleway to be completed in 2018, linking Omokoroa with the existing network.

Queenstown's new masterplan includes: plans to demolish the Memorial Centre, to make way for the Inner Links project road to divert traffic from the centre; a new council building, public transport and better parking facilities.

BUILDERS/COSTS

The Mayoral Housing Taskforce Report lays out plans to investigate a building warranty or insurance scheme to accelerate building consents and construction sector innovation in exchange for reducing the council’s liability in the face of faulty products and building work.

Auckland’s construction sector under pressure with delays in obtaining concrete.

97% of new dwelling consents issued lead to a completed home, but the lag between consent issuance and start of building may hamper efforts to boost housing supply, from figures released by Statistics NZ.

Land use regulation is adding up to $530,000 to the cost of an average Auckland home. A government commissioned report by Sense Partners, says up to 56% of a house’s cost occurs because of the restrictions councils apply, including height, lot sizes, heritage, zoning and urban growth boundaries.

There has never been a better time in the past 40 years to be a job seeker,” Trade Me Jobs head Jeremy Wade says. The New Zealand job market is picking up, with new listings on Trade Me Jobs up 12% on the same time last year and construction up 26.5%.

The first milestone has been reached for the $3.4 billion City Rail Link - completion of a storm water pipe under the central city. A tunnel boring machine, has been excavating and installing the new pipe east of Albert St since November 2016. The CRL is expected to be complete 2023/2024.

DEVELOPERS/FUNDS

Auckland commercial property developers are being hit hardest by increasing construction costs and capacity constraints. Specialist sub-contractors are boosting cost inflation but Colliers' latest report says some relief is likely as development finance becomes more difficult and expensive to secure, which will likely lead to deferment of some projects. Major contractors are also cautious about commitment.

An 888-house subdivision that stalled due to financial difficulty, at Rolleston near Christchurch has been on-sold to New Zealand and Chinese property developers. Some investors had already bought house and land packages worth about $400,000, with their deposits held in a trust account.

The Reserve Bank has been trying to take the heat out of Auckland's housing market for several years. The central bank is considering the addition of debt-to-income ratios (DTIs) to its suite of macro-prudential tools. The bank is undergoing a consultation over its proposal to limit home lending to 5 times household income. A survey conducted by Horizon found 41% of New Zealanders would find it difficult or would definitely not be able to buy a house if the Reserve Bank rules change.

Quotable Value calculated the average cost of building a home rose by 3.5% in the 12 months to May.

Some Apartment owners are having difficulties funding compulsory repairs of building reclads.

MARKET

A record 1,216 new apartments, worth more than $600 m will be completed this year in Auckland's central business district - the highest this decade, research shows.

AUCKLAND

Store wars: smaller, traditional NZ malls picked to die – as Big Malls move in.

• NZRPG has big plans to revive Highbury Mall, Birkenhead and add apartments above, also expanding Westgate at a cost of $1b.
• Kiwi Property is building new office blocks around Sylvia Park and a new $9m dining pavilion.
• Takapuna's ShoreCity, owned by Australian interests is set to expand.
• Property Managers Group (PMG) to buy the 22-shop Kelston Shopping Centre, West Auckland.

Lack of prime office space in Auckland's CBD pushes businesses into the suburban fringes according to Colliers International research director Leo Lee. Only 6.3% of offices outside Auckland's CBD are vacant.

Council maintenance service contract worth $266 m awarded to Ventia (an Australian based contractor), City Care, Urban Maintenance Systems (UMS), City Park Services, Wildlands and Treescape.

Auckland International Airport has plans to invest $1.8 billion in aeronautical infrastructure by 2022.

A new 186-berth floating marina at Kennedy Point in Waiheke’s Putiki Bay, has gained resource consent and construction is expected to take 18 months.

Goodman Property Trust, Highbrook Business Park expects further stages to The Crossing plus industrial.

Significant work is under way on the 14,600 sqm mixed-use Kaukapakapa Village Centre.

The first sod has been turned for a $13m marine-based multi-sports centre at Okahu Bay.

Former Farmers department store’s Grand Tearoom sold for $2.5m to become a luxury penthouse.

Toll Group NZ, purchased a site in Otahuhu to build a new freight facility accessing KiwiRail's network.

Wellington

A concert arena with up to 12,000 seats has received approval to proceed.

Transpower House has been bought by developer Maurice Clark who is behind the $10m restoration and strengthening of the Old Public Trust Building.

Property developer Mark Dunajtschik will pay for a $50m children’s hospital on the Hospital Campus.

The rest of the North Island

Tainui Group Holdings (TGH) has started earthworks for the first stage of its inland port at Ruakura in the Waikato at the same time Ports of Auckland is building an inland freight hub at Horotiu near Hamilton.

Packaging company Visy is building a $100 m facility covering three hectares at Titanium Park.

Tauranga has seen demand for office space rise across all quality grades and sizes over the past 12 months, along with a new low industrial vacancy rate and a surge in suburban retail development.

Tauriko Crossing Stage 2 in Tauranga, a further 27 000 sq m will start late 2017. A 6-hectare site.

Open Country Dairy are building a new milk powder processing plant at Horotiu, Waikato.

15 large projects in the pipeline, means Palmerston North is heading into its busiest period of development for 40 years.

• Massey University's $184m 10-year building plan includes $50m to finish the Vet School's expansion.
• MidCentral DHB will put $282m into redeveloping the Palmerston North Hospital campus.
• The first stages of the $250m Palmerston North ring road project will begin in 2018 ($250m)
• The largest slice of development pie will come from the Defence Force
• Wallace Development's housing redevelopment of the former Hokowhitu campus.

Bethlehem College in Tauranga has approval to establish a new campus in Rotorua.

Tauranga leads New Zealand with 13 subdivisions and developments declared Special Housing Areas.

Rotorua Mayor Steve Chadwick has announced a proposal for a Special Housing Accord.

Tilt Renewables Ltd/Tararua Wind Power wind farm application approved for the Taranaki coast.

Hawkins Construction to build the $55m 8,600sqm home for Tauranga’s Waikato University-led CBD tertiary campus development.

Tauranga developments include 5 new apartments; 4 large commercial/office buildings and a recently built factory for NZ Specialty Kiwifruit Products. Port of Tauranga too is taking back previously leased premises to cope with the growth of its own logistics and distribution operations.

South Island

Christchurch's commercial rebuild is set to peak. Overall, construction is plateauing, an estimated $6billion is still to be spent on delayed public projects: the convention centre and metro sports facility.

Christchurch University’s joint facility with AgResearch has received a $206m injection to enable it to be a cornerstone of Christchurch city's planned innovation hub.

A $75m luxury apartment complex to be built in central Christchurch with Chinese investment will offer homes ranging from $965,000 to $3.75 m.

A Historic Places listed convent and chapel in Christchurch is to get a new lease of life. Home and Family will base its activities from the premises and create a public cafe and wedding venue.

Lyttelton Port Company has released plan for a $56 m, 362m long cruise ship berth in Lyttelton.

27m High arches (part of the $112 m State Highway 1 Russley Road upgrade) are close to completion.

An offer of $35m, along with legislation to fast-track the restoration of Christ Church Cathedral, has been made by the Government and Christchurch City Council.