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Building site - Source: ONE News
Australian building research firm BIS Shrapnel says a surge in building consents late last year should translate into a rebound in the New Zealand residential building sector.
But it also warning that the new building cycle will not match that of the last boom in 2004.
BIS Shrapnel's managing director Robert Mellor says most of the recovery is coming through in detached housing.
"There's not a lot happening in medium or high density apartments. That sector is still very weak with the lack of finance," he says.
"But I think because of lower interest rates and very strong pent up demand in the market there is a strong recovery coming through in owner-occupied housing."
Mellor says the commercial and industrial sector is still quite weak and is likely to fall further over the next year.
"We've got oversupplied markets, particularly office space in Auckland (which) has got a vacancy rate of about 13%, and construction will fall quite significant over the next 12 months."
Mellor believes the sector is going to take another 12 or 18 months to sort itself out.
