The New Zealand building sector is tipped to bounce back from decade-low levels in the coming years, according to a report by an Australian business research group.
BIS Shrapnel's Building and Construction in New Zealand 2011/12-2017 report says the rebuilding of Christchurch after the earthquakes will drive the recovery in the sector as well as a demand for housing in Auckland.
But in a worrying forecast for those seeking to buy a home, it tips home affordability to get worse in 2015.
Report author Adeline Wong says activity in the sector will grow by 50 per cent in the coming year.
She says their estimate of $10 billion a year on consent values for the next five years could be even higher once all earthquake damage claims are processed.
It forecasts that the number of dwelling consents issued annually will recover from 20-year lows to reach a peak of 25,500 from its current levels of 15,000 but still well below the boom years from 2003 to 2005 when 30,000 units were built annually.
But it warns that outside of Christchurch building activity is expected to soften as home affordability worsens again in 2015, due to rising house prices and mortgage rates.
It says a shortage of housing - especially in Auckland - is expected to drive up house prices once demand for houses gathers momentum.
The report anticipates the Christchurch reconstruction will provide a major boost to the non-residential building sector and economic growth will drive new building and refurbishment activity in the warehouse, factory and office building sectors in the North Island.
"The office building sector may have an upside if seismically compromised buildings in Wellington require strengthening work to achieve low risk status and improve their capital values," says Ms Wong.
However, the forecasts may be affected by continuing global economic issues, and the uncertainty caused by large aftershocks in recent months.
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