Building activity has reached its strongest growth rate in almost 15 years and is up sharply in the latest quarter, but critics say it is still not helping relieve Auckland's housing crisis.
Westpac economist Michael Gordon said Statistics New Zealand's latest data yesterday showed a big increase in the value of building work put in place.
"Building work over 2014 as a whole was up 17 per cent on the previous year, the strongest annual pace of growth in nearly 15 years. Rather than a steady climb over the course of the last year, the level of building activity jumped by a near-record 14 per cent at the start of last year and has more or less maintained that level since," he said, predicting construction would remain a significant driver of GDP growth in the next two years.
But Labour's housing spokesman, Phil Twyford, said Auckland activity was tragic and whatever the Government was doing to try to redress the situation, it was clearly not working.
"This pathetic build rate, combined with record immigration, banks falling over themselves to offer mortgage finance and rampant property speculation, means Auckland's out-of-control house price inflation will just continue under this National Government," Twyford said.
ASB senior economist Chris Tennent-Brown also criticised Auckland's house-building rate.
"A concern for us is the lack of growth in Auckland residential building consents over the past few months. Auckland consents had lifted strongly over 2013 and the first half of 2014. However, the growth has now stalled," Tennent-Brown said. "The pace of building in Auckland continues to underperform the pace of population growth from net migration, adding to existing supply shortages.
"Construction activity was slightly stronger than expected, recording a modest volume gain over the quarter. The increase in residential construction is pleasing, given the supply constraints that have been driving house prices higher, particularly in Auckland."
But the Minister of Building and Housing, Nick Smith, and Auckland Mayor Len Brown yesterday also released the latest Auckland Housing Accord monitoring report, which they said showed great progress, although Smith acknowledged there was no way to measure exactly how many houses had been built so far.
To date, 80 special housing areas have been approved and 43,000 dwellings could be built there, the report showed.
The Statistics NZ data showed the value of residential building activity was up in the latest quarter and the value of all work in the sector rose 23 per cent on the same quarter the previous year. The total value of all building work jumped from $12.4 billion in 2013 to $15.2 billion lastyear.
The trend for residential building work has risen 67 per cent since the most recent low point in the September 2011 quarter.