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5 May 2010

Q4 Building Industry Confidence Survey: Consent Numbers to Recover in 2011

2009 Q4 Building Industry Confidence Survey Results
eboss, the online technical library for the New Zealand building industry, has conducted its quarterly survey of building industry professionals to assess confidence levels amongst the architects, architectural designers, builders, engineers, interior designers, specifiers and suppliers that comprise the New Zealand building industry. More than 175 building industry professionals representing every region of New Zealand responded to the survey.

6. Building Consent Numbers to Recover in 2011

Annual Residential Building Consents for 2008 were 18,456 compared with 25,544 in 2007. 2009 Building consents to September 09 total 13,616.

The median estimate among survey respondents for the 2009 annual total is about 15,500, which Mike Flooks says is a realistic projection of where we will land. “I’d pick between 14000 and 15500, although the final figure could be slightly higher given the recent increase in enquiries.”

Many industry experts believe 20,000 is the magic, sustainable number for the industry. Almost half of survey respondents (47.1%) predict we will reach that figure again in 2011, while one third (32.4%) believe that will happen in 2010.

Gareth Kiernan explains, “either late 2010 or early 2011 is when we are forecasting to be on pace for 20,000, however I still believe that will depend on the availability of finance.”

Derek Baxter points out that it is interesting that three quarters of the industry believe it will recover in 2010, but only one third predict a return to 20,000 consents in 2010.

“I agree with many of those surveyed who say we are still a ways off being back above 20,000 new residential building consents. However, I think that why we’re seeing such large numbers in the industry predicting recovery in 2010 in spite of this has to do with the number of architectural designers operating in the renovation space. That area has held steady through the downturn and is in fact growing. And, renovations aren’t reflected in those new-build consent numbers.”

"We have existing housing shortages and we have enjoyed positive net migration for some time, so new builds will pick up," adds Baxter. "But there are some funny things going on with banking. Short term interest rates are low but longer term rates are really well above the 10 year average. People building new houses tend to look at those long-term fixed rates rather than short term floating rates, so we anticipate more people will stay in their existing house and do it up rather than build new until that interest rate situation stabilises.”

Download the full Building Industry Confidence Report here.

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