How the construction industry defied expectation during COVID-19
When COVID struck, expectations for the construction industry were dire. Westpac forecasted devastating job losses of over 20,000 in the sector.
Despite all the doom and gloom, the construction industry has defied those expectations and thrived in 2020, performing better than anyone could possibly imagine. Here’s what that means and why it’s great news for all New Zealanders (especially Aucklanders!).
The Kiwi construction industry defies COVID expectations
Auckland has been in the grips of a housing shortage for several decades. As of the last census in 2018, there was a shortage of roughly 34,000 homes. If dire COVID predictions had come to fruition and the construction industry faltered, the problem would have only gotten worse for the supercity. We’re talking higher prices and fewer homes.
That’s why we’re so lucky that instead of shrinking and cutting jobs, the industry has grown. In fact, Auckland building consents topped $1 billion in value for the first time ever this October, with more than $700 million of residential projects, according to Stats NZ.
The year ending September also saw 37,000 building consents issued throughout New Zealand, which is the highest number since the building boom in the 70s. 15,000 of these were in Auckland.
The future of the construction industry looks bright
The construction industry in Auckland and nationwide is running hot and the future is looking bright.
Record low-interest rates have made building a home and paying a mortgage more affordable. Rates look like they’re heading even lower in the near future as well which could encourage even more building.
House and land prices are also increasing fast. The median price in Auckland has reached $1,000,000 for the first time ever, increasing by 16.3% during the year to October 2020, according to the Real Estate Institute of New Zealand. This has given home buyers and builders more confidence and should continue to buoy up the construction industry into 2021.
Why the state of New Zealand’s construction industry matters
Construction is our fourth biggest industry here in New Zealand, according to Stats NZ. That means if the construction industry takes a hit, then our national economy will feel it too – in the middle of a recession no less.
What’s more, if the construction industry isn’t doing well, that usually means fewer homes are being built. In cities like Auckland and Wellington (and just about every other city in NZ!), where there are housing shortages, that’s a worrying prospect. When housing shortages worsen, it usually leads to higher house prices and higher rents. For these reasons, a thriving construction industry is good for New Zealand – and good for all of us.
With the industry performing so well, interest rates at record lows and house prices skyrocketing – now could also be a brilliant time to build a home. Get in touch with the team at Golstruct to enquire and get in while the market’s hot.