In 2024, New Zealand's property and construction sectors experienced notable developments, marked by both challenges and growth opportunities.
Construction Industry Performance
The construction industry faced a decline of 1.9% in real terms in 2024, primarily due to significant weaknesses in the residential construction sector, compounded by high inflation and increased construction costs.
However, the industry is projected to rebound with an average annual growth rate of 3.4% from 2025 to 2028, driven by investments in transport, health, and education infrastructure projects.
Residential Construction
The residential sector experienced a downturn, with the total value of residential consents issued falling by 9.4% year-on-year in the first five months of 2024, following a 16.5% decline in 2023.
Despite these challenges, the government's "Public Housing Plan" aims to increase public housing supply, focusing on areas with high population growth. The Ministry of Housing unveiled its "Updated Public Housing Plan: 2024 -2025" in late September 2023, outlining the locations of 3,000 public homes to be built by 2025.
Non-Residential Construction
Non-residential building activity is forecasted to decrease from $13.7 billion in 2023 to $11.8 billion in 2024. However, intentions data suggests a significant pipeline, with non-residential activity expected to return to $13.3 billion by the end of the forecast period.
Property Industry Contribution
The property industry remains a cornerstone of New Zealand's economy, contributing $50.2 billion, or 15% of the total GDP.
Market Outlook
Despite the recent downturn, the property and construction sectors are poised for recovery, supported by government initiatives and strategic investments aimed at infrastructure development and housing supply.
Recent Developments in New Zealand's Property and Construction Sectors