Archive | Construction

QV says home-building costs up average 3.5% in year

Quotable Value Ltd said today the average cost of building a new home in New Zealand’s 4 largest cities had risen on average by 3.5% in the year to May, and by 25.5% since the previous price peak of 2007.

The assessment is by QVcostbuilder, an arm of state-owned enterprise Quotable Value Ltd, which provides the latest construction cost data to the property & construction industries through an online subscription web platform tool.

It also shows the average cost of building a standard 140m², 3-bedroom, one-bathroom home rose most in Wellington, up 2.43% over 12 months to an average $258,000. Auckland rose 2.32% to $272,000, Dunedin rose 2.12% to $254,000 and Christchurch rose 1.92% to $277,375.

QV national spokesperson Andrea Rush said building costs rose most in Wellington as its house price index jumped more than 20%.

She said costs for larger houses (between 200-600m²) increased by a higher percentage – 3.39% over the year, 38.6% since 2007.

The averages exclude the cost of land, demolition of existing structures, additional costs due to building code changes, structural requirements, external works, utilities connections, balconies & covered ways, professional & council fees & gst.

Attribution: QV release.

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Sistema’s industrial building wins top property award

The Property Council’s top award was won on Friday night by a manufacturing & warehouse facility near Auckland Airport.

The Rider Levett Bucknall supreme award went to Sistema Plastics Ltd’s 52,000m² facility opened last year on Oruarangi Rd, Ihumatao, in Nakhle Group’s 21ha Auckland International Business Park in the Mangere Gateway business zone near the airport.

Sistema founder & managing director Brendan Lindsay sold his company to US consumer goods company Newell Brands Inc in December for $NZ660 million and has just retired. He only sold on condition that Newell agree to keep manufacturing in New Zealand for the next 20 years and, in the sale process, Newell signed a long-term lease on the building.

Sistema sells a range of plastic storage containers in over 90 countries and brought its warehousing, manufacturing & distribution operations, and its international headquarters, under one roof. The building has 3500m2 of office space & ancillary rooms on 2 floors and 17,000m2 of yard & parking around it.

Awards chief judge Andy Evans said the building’s design was a standout for the attention given to all aspects of work flow, future flexibility, divisibility & expansion: “The project is world class and demonstrated a high level of consultation & collaboration between the design teams, builder & occupier.

“I am also delighted to see the supreme award go to an industrial development that is pushing the boundaries in design & functionality, delivering the most significant industrial building in New Zealand. This building displays the innovation & attitude that has made Sistema Plastics a world leader.”

The category awards (with sponsor in brackets):

Multi-unit residential (Arrow International):
Best in category: Chambers & Station (Auckland)
Excellence: The Dylan Apartments (Auckland)
Merit: 55 Symonds Street (Auckland), Boulcott Conference Suites & Apartments (Wellington)

Education (GIB):
Best in category: Samuel Marsden Collegiate School – Te Manawa o te Kura (Wellington)
Excellence: AUT Building MH (Auckland), Te Ara o Mauao, Toi Ohomai Institute of Technology (Tauranga)
Merit: Haeata Community Campus (Christchurch), Rolleston College (Christchurch), St Andrews College Centennial Chapel (Christchurch), Tarawera High School (Kawerau)

Tourism & leisure (Holmes Consulting Group):
Best in category: Adina Hotel (Auckland)
Excellence: Vector Wero Whitewater Park (Auckland)

Retail (RCG):
Merit: Whangaparaoa retail centre (Auckland)

Industrial (Yardi):
Best in category: Sistema manufacturing facility (Auckland)
Excellence: Big Chill supersite (Auckland), Coca Cola Amatil (Auckland)
Merit: Emerson’s Brewery & Taproom (Dunedin), Red Stag Timber sawmill (Rotorua), The Warehouse Ltd South Island distribution centre (Christchurch)

Civic & arts (Warren & Mahoney):
Best in category: Len Lye Centre & Govett-Brewster Art Gallery (New Plymouth)
Excellence: ASB Waterfront Theatre (Auckland)
Merit: Manu Tukutuku – Randwick Park Pavilion (Auckland), Redcliffs Library (Christchurch)

Health & medical (Fagerhult NZ):
Best in category: Manaaki by Mercy (Dunedin)
Excellence: Burwood Hospital redevelopment (Christchurch)
Merit: St John Christchurch ambulance hub (Christchurch)

Heritage & adaptive reuses (Hawkins):
Best in category: Australis Nathan Buildings (Auckland)
Excellence: Chambers & Station (Auckland), Mason Bros (Auckland)
Merit: Good Union (Cambridge), St Kevin’s Arcade (Auckland), The Christchurch Club (Christchurch)

Urban land developments (Natural Habitats):
Merit: Daventry Street & Torea Place (Auckland)

Commercial office (RCP):
Best in category: PwC Centre (Christchurch)
Excellence: 133 Molesworth St (Wellington)
Merit: Australis Nathan Buildings (Auckland), Mason Bros (Auckland)

Green building (Resene):
Best in category: ASB Waterfront Theatre (Auckland)
Excellence: New Shoots Children’s Centre & Source Café, Pakuranga (Auckland)
Merit: 133 Molesworth St (Wellington)

Property Council members’ laureate: John Dunn

Attribution: Property Council release, Sistema.

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Statistics show both home & non-residential construction well on track

The third consecutive strong quarter lifted home construction by 23% in the year to March, returning to the 22%-plus growth path begun in 2012, which ran through to early 2015. In the year to March 2016, that growth path remained positive but dipped to 11.7%.

Non-residential construction, on the other hand, has faltered more than it’s surged ahead over the last 5 years. However, the usual first-quarter dip at the start of 2017 also followed 3 strong quarters and didn’t fall anywhere near the level in the March 2016 quarter. The value of 3 months’ work at the start of 2017 was equal to about 4 months’ work in 2012.

The total value of all construction over the March quarter, $4.935 billion, was up 10.9% on the March 2016 quarter and took building work put in place over the year to March to $20.357 billion, up 18.7% ($3.2 billion on the previous year).

In Auckland, the value of all building work in the March quarter was up 12.5% over the March 2016 quarter at $1.761 billion ($1.565 billion). Between those 2 March quarters, construction jumped by between 32-39%/quarter, lifting building work to a quarterly range of $1.83-1.985 billion.

Construction in the region crossed the $1 billion/quarter line in the September 2013 quarter.

  • This is a truncated version of my usual building work story and indicates a more positive picture than Statistics NZ’s assessment via trend & seasonally adjusted figures. I’ll try to return to it over the next couple of days. In the meantime, the Statistics NZ graph comparing consents & work completed gives a helpful perspective of construction direction through to the end of 2016.

Attribution: Statistics NZ tables & releases.

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Consents down in short month but annual figure stays above 30,000

Building consents for new homes dropped by 672 from March to 2106 in April, and dropped by 255 compared to April last year, Statistics NZ said today.

Importantly for the Government, the annual rate of consents for new homes stayed above 30,000 – 30,371 for the latest 12 months, down from 30,626 for the year to March, up from 30,162 for the year to February.

In Auckland, the 726 consents for the month were ahead of 699 in April last year but well down from the 800 in February and 942 in March, and the 10,226 for the year were up on the 10,045 to February, 10,199 to March and up 9.3% on the 9353 for the year to April 2016.

Statistics NZ noted that Easter’s occurrence in April would have reduced building consents issued for the month. In addition, when Anzac Day fell on a Tuesday it resulted in another 4-day weekend for many.

You can only use that reasoning so far, though. The value of consents for new homes nationally in March last year (including an Easter break) was $1.021 billion, falling to $948 million in the Easter-less April. The value this March was $1.199 billion, falling to $921 million.

The value of consents for all construction fell from $2.077 billion in March to $1.351 billion in April (last year, $1.505 billion down to $1.430 billion), so one April against the other the fall was 5.5%. For the April year, the value of all construction was up 10.6% to $19.45 billion ($17.589 billion in 2016).

Non-residential consents for the month were down 10.5% to $411 million ($459 million), but for the year were up 9.7% to $6.4 billion ($5.85 billion). Floor area was down 28.8% for the month to 204,000m² (286,000m²), and was down 17% for the year to 2.64 million m² (3.19 million m²).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1487 (1742), (1815), 21,179 (20,098), up 5.4% for the year
Apartments: 228 (25), 2874 (2094), up 37.2%
Retirement village units: 46 (259), 1702 (2139), down 20.4%
Townhouses, flat & units: 345 (335), 4616 (3707), up 24.5%

Around Auckland by ward, this April & last, and the April 2017 year & previous 12 months:

Region: 726 (699), 10,226 (9353)
Rodney: 81 (89), 882 (948)
Albany: 125 (135), 2508 (2316)
North Shore: 25 (17), 494 (528)
Waitakere: 25 (60), 617 (506)
Waitemata & Gulf: 166 (23), 1104 (857)
Whau: 51 (18), 343 (192)
Albert-Eden-Roskill: 25 (21), 674 (474)
Orakei: 4 (27), 283 (370)
Maungakiekie-Tamaki: 31 (26), 417 (463)
Howick: 28 (71), 452 (601)
Manukau: 32 (32), 394 (504)
Manurewa-Papakura: 73 (75), 1106 (890)
Franklin: 60 (105), 952 (704).

Attribution: Statistics NZ tables & release.

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Updated: Non-residential spurt lifts building consents over $2 million for month

Published 28 April 2017, updated 30 April 2017 with figures around Auckland region:
A sharp jump in non-residential projects in March lifted building consents over $2 billion/month for the first time.

The total for all construction was $2.077 billion ($1.505 billion in March 2016). The total for the year was $19.529 billion ($17.357 billion) – a $2.17 billion rise.

Non-residential consents jumped 82% from $460 million last March to $837 million this March. The floor area consented rose 41%, from 230,000m² to 325,000m².

These consents tend to be lumpy, making comparisons in a non-residential sector between one month & another meaningless. The big tickets in non-residential for this March were office (which includes public transport) $191 million, hotels $167 million, hospitals, nursing homes & health $104 million, shops, restaurants & bars $102 million.

Residential consents for March were up 17.4% compared to last March, and up 14.9% for the year. Consents for new homes totalled 2779 this March (2315 a year earlier), and 30,626 for the year (27,789).

Total residential consents for the month were worth $1.199 billion ($1.021 billion a year earlier), and for the year $12.865 billion ($11.038 billion for the previous 12 months).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1923 (1815), 21,434 (19,721), up 8.7% for the year
Apartments: 252 (32), 2671 (2536), up 5.3%
Retirement village units: 197 (134), 1915 (1929), down 0.7%
Townhouses, flat & units: 407 (334), 4606 (3603), up 27.8%

Around Auckland by ward, this March & last, and the March 2017 year & previous 12 months:

Region: 942 (788), 10,199 (9566)
Rodney: 122 (100), 890 (912)
Albany: 227 (178), 2518 (2332)
North Shore: 53 (75), 486 (533)
Waitakere: 55 (51), 652 (483)
Waitemata & Gulf: 116 (14), 961 (1239)
Whau: 40 (17), 310 (187)
Albert-Eden-Roskill: 37 (40), 670 (478)
Orakei: 12 (9), 306 (386)
Maungakiekie-Tamaki: 26 (22), 412 (462)
Howick: 24 (49), 495 (559)
Manukau: 38 (48), 394 (486)
Manurewa-Papakura: 114 (93), 1108 (876)
Franklin: 78 (92), 997 (633)

Attribution: Statistics NZ tables & release.

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Building institute launches 2 industry-improving scholarships

The NZIOB (Institute of Building) Charitable Trust has launched 2 $10,000 scholarships for projects that will improve the industry. Entries close on Friday 30 June.

The trust has also decided on its first fundraising event aimed at eventually making grant payments from earnings rather than capital.

Trust chair Gina Jones said yesterday the institute had established the scholarships to recognise, encourage & financially support recipients from a trade, technical or professional role to pursue a project linked to building through research, practice or professional development.

“We have a mission to encourage aspirational thinking that lifts the construction industry’s performance and we are particularly interested in applications from members who have a project that will introduce improvements to the industry.

“We’re looking for applicants with a project that has the potential to advance some aspect of design, construction or management of buildings in New Zealand, and thereby enhance the quality of our built environment.”

The successful recipients will be chosen by a panel comprising 3 past presidents of the institute. Winners will be announced at the institute’s awards night on Friday 25 August in Auckland.

Ms Jones said the trust’s first fundraising event would be a lunch with former All Black captain – and builder – Sean Fitzpatrick at Mac’s Brewbar in Wellington on 30 June, the day before the British & Irish Lions play the All Blacks at Westpac Stadium.

NZIOB Charitable Trust
Scholarship details

Attribution: Institute release.

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Statistics House quake damage prompts standards review

Building & Construction Minister Nick Smith said on Friday design standards & building laws would be reviewed in response to an investigation into structural damage to Statistics House in Wellington in the Kaikoura earthquake on 14 November.

He released an independent panel’s findings into the performance of the building during the quake, which focused on its design & construction and the land influences on it.

The panel found a combination of 4 factors contributed to the partial failure of lower floor segments.

2 of the factors – the flexible frames & style of floor construction – combined with significant shaking for up to 120 seconds, and localised amplification of the shaking, to compromise the support of the lower precast concrete floor units.

The panel also noted that the combination of factors that led to the partial collapse of floor units in Statistics House wasn’t anticipated by the design standards in place when it was built in 2005.

The Ministry of Business, Innovation & Employment, the Institution of Professional Engineers (IPENZ) & the institution’s technical societies have produced information for owners & building professionals responsible for assessing & designing multi-storey concrete moment-resisting frame buildings with precast concrete floor systems that may be vulnerable to loss of floor support during an earthquake.

Performance “unacceptable”

Dr Smith said: “The performance of Statistics House in the Kaikoura earthquake was unacceptable and could have caused fatalities. This quake was large & unusually long, but a modern building like Statistics House should not have had life-threatening structural damage. The building was designed to the industry practice of the time, but this did not fully account for the effects of beam elongation during an earthquake, an issue that was deficient in the concrete structures standard at the time of the design.

“The design flaw is quite specific to highly ductile framed concrete buildings with precast floor slabs, and particularly those with multi-bay frames. We need to follow up on similarly designed buildings through councils & engineering companies so that where it is a problem, it can be rectified. This has already been done in respect of Wellington as a consequence of the preliminary findings in Statistics House, but now needs to be followed up elsewhere.

“We also need to amend the concrete structures standard to ensure newly designed buildings are adequately designed to cope with beam elongation during long-duration earthquakes. This will be done this year.

“A compounding factor was geological basin effects that are not well understood but which have also been observed in other earthquakes internationally. This is not to do with reclaimed land but the amplification of ground shaking in a basin. This phenomenon is similar to the way sea waves respond to a wall in an enclosed bay. This is an area of seismic science that needs further research, particularly in respect of Wellington, and to be considered as part of a review of the earthquake actions standard.

Building law issue

“There is a building law issue that arises from this report on which I have asked officials to report. The Ministry of Business, Innovation & Employment has limited powers to follow up on design deficiencies like those identified in this report, beyond those specifically provided for following civil emergencies. This means the ministry cannot require building owners to follow up on these sorts of potentially serious technical problems. I have asked the ministry to report on whether additional powers are needed in the Building Act.”

Dr Smith said New Zealand was at the cutting edge of international seismic design standards, but hadn’t yet solved all of the potential ways a building can fail: “Most buildings in Wellington performed well despite the ferocity of the Kaikoura earthquake. We need to take the opportunity following such earthquakes to learn as much as we can and to further strengthen our standards & systems to improve building safety for the future.

“These detailed issues over the performance of modern buildings are important for improving design standards, but they should not divert attention away from the far more significant risk to life of older buildings. The Kaikoura earthquake was sufficiently distant from Wellington that the city did not get the dangerous high frequency shaking that poses the greatest risk to life.

“The largest safety gains for Wellington are to be made in the initiatives requiring unreinforced masonry facades & parapets to be tied back over the next year, and all earthquake-prone buildings under 34% of Building Code to be upgraded under the new law coming into effect on 1 July.”

Statistics House investigation
Framed buildings with precast concrete floor systems

Attribution: Ministry website & ministerial release.

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Updated: Home consents up slightly, but revision lifts November figure to 12-year high

Published 31 March 2017, additional material 1 April 2017
Consents for new homes issued in February were up slightly – by 39 – over February last year, to 2418, raising the tally for 12 months to 30,162.

Perhaps of greater note was the revision of the November consent figure, from 2973 to 3005 new homes. I think (without time to check fully) this is the first month of 3000-plus consents since the 3447 in June 2004, which included 977 apartment consents.

That high in 2004 came 30 years after the previous high, in 1974, which was toward the end of another construction boom.

The November 2016 high theoretically came without the push from apartments, only 375 of them consented that month. But, including the 507 flats & townhouses and the 205 retirement village units (recent extra segmentation by Statistics NZ), consents for intensive construction totalled 1087.

The suburban unit/townhouse segment has fallen behind the (mostly central) apartments sector only twice in the last 18 months. That segment of the market has seen 24% growth over the last 12 months to 4533 units (3651 in the previous 12 months), whereas apartment consents have slipped 4.8% to 2451 (2574) and retirement village consents have slipped 6.2% to 1852 (974).

Standalone house consents have risen 9.1% over the 12 months to 21,326 (19,546).

Residential consents in Auckland were up slightly for the month to 800 (787) to 10,045 (9534) for the February year.

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Additional material:

Around Auckland by ward, this February & last, and the February 2017 year & previous 12 months:

Region: 800 (787), 10,045 (9275)
Rodney: 87 (80), 868 (888)
Albany: 196 (182), 2469 (2362)
North Shore: 72 (19), 508 (473)
Waitakere: 44 (44), 648 (474)
Waitemata & Gulf: 73 (179), 859 (1246)
Whau: 2 (8), 287 (179)
Albert-Eden-Roskill: 33 (20), 673 (456)
Orakei: 71 (8), 303 (485)
Maungakiekie-Tamaki: 6 (21), 408 (467)
Howick: 51 (51), 520 (602)
Manukau: 14 (51), 404 (454)
Manurewa-Papakura: 75 (67), 1087 (865)
Franklin: 76 (57), 1011 (583)

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Residential consents this February & last, and the February 2017 year & previous 12 months, in a selection of provinces:

Northland: 131 (80), 1261 (896)
Waikato: 294 (274), 3512 (3160)
Bay of Plenty: 226 (200), 2517 (2055)
Wellington: 133 (113), 2023 (1711)
Canterbury: 361 (525), 5798 (6319)

Commercial presents mixed picture

Commercial sectors present a very mixed picture. Overall, floor space is down in this month’s & year’s consents, but values are up. There’s not an even picture across sectors.

Non-residential consent floorspace for February was down 12.9% to 189,000m² (217,000m²), and for the year down 18.2% to 2,631,000m² (3,218,000m²).

Non-residential consent value for February was up 10.3% to $410 million ($372 million), and for the year up 5.3% to $6.086 million ($5.777 million).

Big changes by value for the year were hostels, boarding houses & prisons up 42.8% to $227 million; and hotels, motels & other short-term accommodation up 85.2% to $276 million.

The value of consents for all construction for the month fell 6.2% to $1.492 million ($1.59 million), and for the year it was up 10% to $18.956 billion ($17.238 billion).

Attribution: Statistics NZ tables.

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Auckland above 10,000 home consents/year again

Auckland’s consent level for new homes got back above an annual rate of 10,000 in January after dipping in December. The 512 consents in January were 6 above the number a year earlier.

For the year, Auckland had 10,032 consents for new homes, compared to 9930 in the 12 months to December and 9275 in the 12 months to January 2016.

Nationally, consents for the month were up 3.4%, from 1695 to 1752, and for 12 months they were up 11.1%, from 27,124 to 30,123.

January is the traditional quiet month everywhere, but not usually as quiet as it got in Auckland’s central Waitemata & Gulf ward, where consents numbered only 9 in December and fell to 4 in January.

The Waitemata part of that ward covers the cbd & its western fringe, very much apartment & townhouse territory, so consent applications tend to be lumpy. In 8 of the last 12 months the ward had fewer than 50 consents, 3 months of 114, 155 & 179, and one outstanding month when 353 consents were issued.

In the previous 12 months, the ward’s consents exceeded 100 only twice, but they were months of 405 & 278, contributing to a total for 12 months that was 20% higher.

Looking forward into the new era of Auckland’s mostly approved unitary plan, when more intensification will be possible across 90% of suburbia, developers may disperse their search for cheaper land, resulting in more intensification in smaller centres.

Consents nationally for standalone houses fell slightly for the month but were up nearly 11% over 12 months, while consents for apartments have dipped slightly over 12 months and those for suburban townhouses & units are up nearly 28%.

Around Auckland by ward, this January & last, and the January 2017 year & previous 12 months:

Region: 512 (506), 10,032 (9275)
Rodney: 55 (60), 861 (865)
Albany: 194 (123), 2455 (2304)
North Shore: 17 (13), 455 (473)
Waitakere: 18 (46), 648 (465)
Waitemata & Gulf: 4 (80), 965 (1160)
Whau: 7 (11), 293 (189)
Albert-Eden-Roskill: 22 (29), 660 (449)
Orakei: 8 (10), 240 (490)
Maungakiekie-Tamaki: 25 (18), 423 (460)
Howick: 15 (17), 520 (572)
Manukau: 17 (36), 441 (419)
Manurewa-Papakura: 50 (37), 1079 (848)
Franklin: 80 (26), 992 (581)

Consents for the 4 residential market segments in January & the 12 months to January 2017 compared to the previous January & previous 12 months:

Houses: 1253 (1286), -2.6%; 21,277 (19,183), 10.9%
Apartments: 116 (89), 30.3%; 2430 (2511), -3.2%
Retirement village units: 98 (135), -27.4%; 1915 (1908), 0.4%
Townhouses etc: 285 (185), 54.1%; 4501 (3522), 27.8%.

Sector & total values against January 2016 or the previous 12 months:

New homes: $619 million/month ($641 million), -3.5%; $10.625 billion/year ($8.906 billion), up 19.3%
Alterations & additions: $129 million/month ($115 million), 12.4%; $1.899 billion/year ($1.728 billion), up 9.9%
Total residential: $748 million/month ($756 million), -1.1%; $12.524 billion/year ($10.635 billion), up 17.8%
Non-residential: $338 million/month ($310 million), 9.2%; $6.048 billion/year ($5.876 billion), up 2.9%
Total, including non-building: $1.108 billion/month ($1.083 billion), 2.3%; $19.055 billion/year ($16.922 billion), up 12.6%.

Earlier stories:
6 March 2017: Third quarter of plus-32% rises in Auckland construction input
10 February 2017: Townhouses & flats dominate shift in home styles

Attribution: Statistics NZ tables.

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Third quarter of plus-32% rises in Auckland construction input

The value of building work put in place in Auckland in the December quarter fell just short of $2 billion, and was up $500 million on the input a year earlier.

Image above: Residential work has soared well above the static input to commercial construction in Auckland.

Figures out from Statistics NZ on Friday show for the whole of 2016, $2 billion more was spent nationally on new homes than in 2015 – up from $8.4 billion to $10.5 billion – and across all construction sectors there was a $3.3 billion rise nationally to $19.87 billion spent for the year, all ex-gst.

Statistics NZ said residential work in Auckland rose 4.5% in the December quarter, and non-residential 17%.

Nationally, the 1.1% rise in residential work in the December quarter was the smallest increase in 6 quarters.

Combining the input in all sectors, the growth in construction input in Auckland hasn’t risen steadily since the market bottomed in 2011.

There was a spurt of 9-13% quarterly growth in 2012, and that was followed by quarterly growth of around 30% for the last 3 quarters of 2013, tapering off to a 20.5% increase in the March 2014 quarter and actually declining in the September quarter that year.

Since that dip, Auckland growth has been strong: 13.6% in the December 2015 quarter (compared to the same quarter a year earlier), then rises of 25.6% in the March 2016 quarter, 39% in June, 32.3% in September & 34.2% in December.

Attribution: Statistics NZ tables & release.

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