Bay spends $1 billion on construction for first time

CLEARING THE WAY: Demolition underway in Mount Maunganui to make way for a shopping centre. Photo / File

The Bay's building boom has crossed a major milestone, with councils approving $1 billion of construction in a calendar year for the first time.

Building consent figures showed Tauranga City Council approved $777 million of new construction last year.

When added to the Western Bay of Plenty District Council's tally of $284m, the total came to $1.06b.

The consents were granted for a range of activities, from building pools and fireplaces through to industrial-scale constructions, demolitions and alterations.

A breakdown of the figures showed two-thirds of Tauranga's approvals last year were for building new homes, compared with one-third in the Western Bay.

October was Tauranga's biggest month in 10 years for building consents, with $85.6m approved. This included an all-time record of $62m for new homes. During the same month two years earlier, the figure was just $21m.

Tauranga City Council's manager of building services, Patrick Schofield, attributed the increase in consent values to larger houses being built and the growing costs of construction, labour and material.

Property developer Peter Cooney said inflation was affecting all parts of the Bay building industry, including labour, materials and land. It was partly driven by immigration from Auckland and elsewhere.

"There's a perfect storm going on at present," he said. "There's been a huge jump due to demand, and the prices of everything have gone up."

Jafa Construction owner Jeff Parkes agreed that labour costs were going up, and said it was hard to find good tradesmen. His business had been very busy.

"The whole of last year was flat out, and we're booked up until July or August this year," he said. "We're doing large refurbishments, and I've been turning away bathroom-type work just because it's too small."

But fast growth could provide challenges for councils, which were forced to spend ratepayer cash on infrastructure such as roads, waste and water facilities.

Western Bay mayor Garry Webber said growth brought more ratepayers into council areas, but there was a lag between paying for infrastructure and gaining the benefits of those rates.

His region was fortunate because a lot of money was spent on such infrastructure 10 or 20 years ago, when growth was anticipated but did not happen. Places including Omokoroa, Katikati and Pongakawa therefore had reasonable facilities in place.

"I don't think there will be too many challenges for us," Mr Webber said.

The consent growth was problematic for Tauranga City Council, which had been forced to outsource the processing of the applications to Porirua City Council and subsidiaries of Holmes Group. It had been receiving 40 to 80 applications a week and outsourcing 15 to 25 of those.