New Zealand construction pipeline feels COVID-19 impact
A report commissioned by New Zealand’s Ministry of Business Innovation and Employment says the country’s construction sector is likely to continue to feel the impact of COVID-19 for the next few years.
According to the National Construction Pipeline Report 2020, which was released on December 21, a short-term decline in construction activity has been forecast, due to the COVID-19 pandemic.
The report provides a projection of national building and construction activity for the next six years, through to December 31, 2025, based on current settings. It includes national and regional breakdowns of actual and forecast residential building, non-residential building, and infrastructure activity.
“While there is a lot of uncertainty as a result of the pandemic, the Report expects a decline in the total value of construction through to 2023, before it starts to recover,” says John Sneyd, General Manager Building System Performance, Ministry of Business, Innovation and Employment.
Residential construction activity is the largest contributor of national construction, making up 55 percent in terms of value last year. Historically, residential activity is the most volatile to changing economic conditions and it is predicted this will be hardest hit by COVID-19, the report says.
Therefore, it forecasts that the value of residential construction will fall 43 percent from £12.5 billion in 2019 to £7.11 billion in 2023 because of an anticipated decrease in new dwelling consents from the high of more than 37,000 in 2019, to an average of 26,800 per year for the next six years.
“Despite the forecast, demand for residential housing remains strong at the moment. There is steady pipeline of demand and latest data show new home consents are currently at a 46-year high.
“Infrastructure construction is expected to increase, particularly in Auckland and Waikato/Bay of Plenty. Infrastructure is the only construction area forecasted to see sustained growth, reaching £5.35 billion in 2025– up 6.3 percent on 2019,” says Sneyd.
Furthermore, the report states that compared to 2019, Auckland is expected to see a reduction in total construction activity of 16 percent to £7.58 billion by the end of 2025.
Waikato/Bay of Plenty is forecast to decrease by 18 percent to £2.91 billion, Wellington by 35 percent to £1 billion, Canterbury by 57 percent to £1.59 billion, Otago by 33 percent to £955 million and Rest of New Zealand by 29 percent to £2.49 billion.
Meanwhile, non-residential construction activity (including hotels, offices, retail outlets and industrial buildings) is forecasted to drop 42 percent nationally from £5.30 billion in 2019 to £3.07 billion in 2022 before recovering to £3.92 billion in 2025.
Multi-unit dwellings accounted for 41 percent of all dwellings consented in 2019. Multi-unit dwellings are anticipated to be hardest hit by the COVID-19 pandemic, particularly apartments, and these are forecast to account for 32 percent of all dwellings consented in 2022.
The Report is based on building and construction forecasting by the Building Research Association of New Zealand (BRANZ), and Pacifecon NZ Ltd data on researched non-residential building and infrastructure intentions, a statement from MBIE says.
The Report’s forecasts also modelled optimistic and pessimistic scenarios, taking into account lessons from the Global Financial Crisis but it points out that COVID-19 is an unprecedented event and there is still a significant degree of uncertainty around the forecasts.
Research reveals 164% rise in searches for loft conversions
Market research conducted by building supply specialist Insulation4Less has revealed that searches for ‘Loft Conversions’ rose by a staggering 164% between May and June of this year, while searches for ‘Loft Conversion Ideas’ jumped by 186% as people spend more time on home renovations this summer.
The company also found that the most popular use for a loft conversion is for an additional bedroom, while an extra bathroom was the second-highest search term. Walk-in wardrobes came in third, beating out a home office in fourth while converting a loft into a home cinema round off the top five.
According to a recent study, a loft conversion can add roughly 20% to the value of a property. With the average UK house price standing at £267,000 in January 2021, this represents an average increase in value of more than £53,400.
Johnpaul Manning, Managing Director of Insulation4Less, said: “If the last year has taught us anything, it's that having space is essential to our mental health and wellbeing, so it's no surprise that people are taking the time to focus on home improvements to help them make the most of their home.
As one of the most under-utilised areas in any property, loft conversions represent a great opportunity to maximise the use of space that not only improves quality of life but also has the capacity to add value to the home”, he said.
Manning added that it's important to remember that a loft conversion isn't just your average DIY project, and should never be done on the spur of the moment. “A significant amount of planning needs to happen to make it a reality, and an understanding that life can be disrupted while the build is taking place.
“While it's definitely a worthwhile project, I'd recommend that anyone considering a loft conversion should do some in-depth research to really understand what's needed to make it a reality”, Manning said.
Is Your Loft Suitable For a Conversion?
While loft conversions do look amazing and add an extra element to a property, not all homes may be suitable. Insulation4Less says that this is due to a variety of factors.
“It's important to make sure that your roof is structurally sound enough to handle a conversion”, the company said. Although there are different types of roof structures, they mostly fall into two distinct categories: a traditional roof, and a trussed roof.
A traditional roof: was typically found in pre-1960s houses. Rafters on traditional roofs run along its edges, leaving a good amount of free space. However, they might still need new or extra support. Trussed roofs, on the other hand, have ‘W’ shaped rafters that support the roof and the floor structure. Even though truss roofs may appear to be harder to convert, it’s not impossible; the ‘W’ shaped rafters can be replaced with an ‘A’ shape structure which creates a hollow space. While this can add additional costs, it could be a worthy investment, so take this into consideration during your planning process.
“Another thing to consider is the roof's height and pitch, and how that will impact the amount of space you’ll have. You’ll need a minimum height of 2.2m to ensure proper clearance. While you might be happy to settle for something a little shorter on paper, make sure your happy with the height you have and the effect it could have on the enjoyment of the space”, Insulation4Less advises.
The company recommends doing research before going to an architect or contractor. “Ultimately, look for other conversions on your street or in similar properties, and if you feel comfortable, ask if you can have a look and discuss how their project came together - you’ll find a wealth of information that could really help your own project in the future”.
Information credit: Insulation4Less.