This as the construction industry reaches new heights
The total value of construction projects has surged by 12.4%, but at the same time, houses are getting smaller and more costly, the government’s annual report card has revealed.
Read more: Will demographics create a split market?
The multiple challenges faced by the building industry, including skyrocketing material prices and a shortage of workers, have been well documented.
But according to the Ministry of Business, Innovation and Employment’s sector trends report, the industry has generated $18.1 billion, or about 6% of New Zealand’s GDP in the last year, Stuff reported.
But how does this impact housing in New Zealand?
The report showed that the cost of building a new house increased by 18.3% in the year ending June, driven mainly by the cost of materials – specifically wood, timber, and concrete.
The cost of labour, too, surged by 4.2%, compared to 3.4% in all other industries.
Canstar data showed that the average cost to build a house in Auckland in 2022 was $378,210, and in Northland it was $499,509.
Stats NZ reports showed the rate of completion of new houses is slowing down. From the 387 days the average house took to complete in 2020, it has gone up to 406 days in the year ending March.
In the next two decades, the total number of NZ households is expected to grow by 26.4% – from 1.8 million in 2018 to 2.3 million in 2043.
Not only were houses taking longer to complete, they were getting smaller too. In the past five years, all new dwellings consented shrank in average size – from 172sqm to 150sqm.
Read next: Building consents continue to tumble
That could be partly due to the rising number of townhouses, with multi-dwelling units making up 73% of consents in Auckland from 2012 to 2022, and 64% in Wellington.
Standalone houses, too, have shrunk in average size – from 212sqm to 195sqm. Meanwhile, apartments increased slightly from 105 to 109sqm, Stuff reported.
