Auckland’s construction boom
Total Property - Issue 4 2016
Unprecedented levels of growth in building and construction are now taking place in New Zealand, with Auckland firmly in the lead.
Nationally, the value of total new buildings consented over the last year to February 2016 was $13.5 billion, made up of $9.2 billion in the residential sector and $4.3 billion in the commercial sector.
This year, the value of New Zealand’s property building for the March quarter was $4.4 billion, made up of $2.8 billion in the residential sector and $1.6 billion in the commercial sector.
Auckland accounts for a third of all building and construction by value at $1.6 billion even ahead of the Canterbury rebuild at $1.1 billion.
The Rider Levett Bucknall Crane Index, which tracks the number of crane towers in key cities to provide a simplified measure of construction workload, has Auckland leading with 47 cranes followed by Christchurch with 30 and Wellington at nine.
The construction boom is attributed to New Zealand’s strong macroeconomic fundamentals following the global financial crisis as well as:
a backlog of infrastructure and public sector projects as a result of inadequate investment in infrastructure in the past and patchy building activity in comparison to global standards;
record net inward migration which shows no signs of abating and which has resulted in a severe shortage of housing especially in Auckland;
commercial developments in the pipeline, especially in Auckland where there is a long-term shortfall in commercial building activity; and
high infrastructure demand.
A working group sponsored by Fletcher Building, Hawkins Construction, Naylor Love Construction and Dominion Constructors says construction activity will peak in 2018 and 2019. The group estimates 32,000 more workers – a 21 per cent increase – will be required by 2018 to meet Auckland’s building demand.
Auckland’s construction projects include:
a $675 million 30-level office tower accompanied by a 125-room hotel tower proposed for 46 Albert Street;
A 16,735m2 office building being developed for Datacom in Auckland's Viaduct Quarter for $86.2 million;
NZX-listed Precinct Properties’ development of a $500 million 36-level glass tower with some 37,000sq m of office space on Queen Elizabeth Square at the bottom of Queen Street;
a $100 million investment in a new office tower in Britomart mooted by Cooper & Company;
the Downtown Shopping Centre redevelopment valued at $400 million;
SkyCity's international conference centre valued at $500 million; and
three new luxury hotels in the Wynyard Quarter at SkyCity and in the $350 million, 52-level NDG Auckland Centre tower building.
In the civil sector, the Waterview Tunnel is set complete the Western Ring Route, a 48km motorway route between Manukau in the south and Albany north of Auckland via state highways 20, 16 and 18. It will bypass central Auckland to the west, SH1 and the Auckland Harbour Bridge for road travel through and within the region.
Other big civil infrastructure projects include:
the new combined international and domestic terminal at Auckland Airport;
the $2.4 billion City Rail Link and;
the $1.5 billion Auckland Manukau Eastern Transport Initiative (AMETI).
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