Infrastructure push thrills property sector

Changes likely to boost economy on 2018, say realty bosses

New Zealand’s $1 trillion real estate sector could enjoy a shot in the arm from a big infrastructure push and consenting reform by the Government in 2018, an industry boss hopes. Connal Townsend, chief executive of the Property Council, has high hopes for the new system. “There will be a lot of focus by the Government to drive infrastructure hard and to improve the consenting process in both building and resource consenting,” said Townsend. The Property Council has 730 members, who control about $50 billion of assets. “There will be . . . a lot of talking and deep thinking about the fact that local authorities need to be risk-averse,” he said. Townsend, who said property contributed $83.4b annually to New Zealand’s gross domestic product, believed the economy would get a boost from the sector in 2018.

He wasn’t sure there would be strong capital growth and said there had been slight value declines in property over the last six months. “I dispute whether there will be strong capital growth. There will be growth — the industry is still doing quite well,” he said.

John Polkinghorne, an associate director of Parnell-based retailing and property consultants RCG, said the construction sector was at record levels, with 170,000 people working in it.

“So there are real challenges to [scaling up further]. The focus has to be on boosting productivity,” he said.

“At least one major Auckland shopping mall expansion will get under way, although it won’t open until 2019. Clear regional differences will emerge in 2018: Christchurch has overshot and could end up with an oversupply of housing, while shortages remain in many other cities and will take years to correct in Auckland.”

Clear regional differences will emerge in 2018: Christchurch has overshot and could end up with an oversupply of housing, while shortages remain in many other cities and will take years to correct in Auckland. John Polkinghorne