Building activity in New Zealand picked up in second quarter of 2018

Total building activity volumes increased by 0.8% in the second quarter of 2018 in New Zealand, recovering from a decline in the first three months of the year, official figures show.

This rise reversed a 0.8% fall in the first quarter of the year, according to the data from Statistics New Zealand.

‘Both residential and non-residential building activity increased in the latest quarter, recovering from small falls in the March 2018 quarter,’ said construction statistics manager Melissa McKenzie.

‘Quarterly construction activity has been hovering around the same high level for the last two years, with the total volume being higher than at the previous peak in the June 2005 quarter,’ she explained.

In value terms, including price effects, building activity rose 1.8% quarter on quarter and growth was driven by activity Auckland with more non-residential building activity on large projects. These included shops, restaurants, and bars; and hotels and student accommodation.

Other North Island regions also had increased non-residential building values. These regional rises more than offset a fall in Canterbury, as the post-earthquake rebuild continues to wind down, the report points out.

Meanwhile, the latest index figures from Barfoot & Thompson suggest that the residential market in Auckland is recovering as the average sales price increased month on month in August and year on year to $928,266.

However, Peter Thompson, managing director of Barfoot & Thompson, said that the increases are unlikely to be the forerunner of another seller’s market. ‘Rather they are an indication that the bottom of the price cycle is likely to have been reached, confidence in prices is returning and that as spring advances buying pressure will increase,’ he explained.

Sales numbers are still falling, down by 4.2% on those for July while new listings were up 25% month on month and are 5.6% higher than for the same month last year.