Log prices increase in Northland

Rosvall Sawmill managing director Mark Hansen said Northland wood was in demand and attracting top prices, both in Auckland and overseas. Photo / Michael Cunningham

A demand for Northland's structural timber for the buoyant residential building market, particularly in Auckland, has pushed the price of the region's logs to $126 a tonne, more than the national average of $117.

The $126 a tonne to come into effect next month is also the export price and a leading Northland log exporter said the demand for sawn timber for structural framing was "very high".

Mark Hansen, managing director of Rosvall Sawmill in Whangarei, made the comments following AgriHQ's monthly survey that said the buoyant residential building activity has pushed up the average price for top structural logs this year rise to the highest in more than two decades.

The average price for structural S1 logs in the domestic market held at $117 a tonne in December, the highest level since June 2014, according to AgriHQ's monthly survey of exporters, forest owners and saw millers.

S1 logs averaged $113/tonne this year, the highest level since 1994 when it averaged $118/tonne, AgriHQ said.

Record high net migration and low interest rates are putting pressure on the nation's housing market, driving up prices and spurring construction activity.

Data released by Statistics NZ showed residential building consents passed 30,000 for the first time in 11 years in the 12 months through October.

Damage to roads and other infrastructure following the Kaikoura earthquake last month had added to supply constraints through Canterbury and some areas further north, he said.

But Mr Hansen said Northland would not be satisfying demand for logs in the South Island as places such as Christchurch already had big sawmills and enough wood.

However, he said Auckland and overseas markets would continue to have a lion's share of Northland wood.

"Building infrastructure has certainly created demand for saw logs for structural framing. Northland is feeding Auckland so that market is creating demand for sawn logs and, of course, there's the export market," he said.

Mr Hansen said wood processors in Whangarei, particularly those close to Northport at Marsden Pt, were paying $123 a tonne but that price would rise to $126 from January 1.