North and South unite! Building shared success at the 2022 NZIBES South Island Summit

North and South unite! Building shared success at the 2022 NZIBES South Island Summit

 

Founded by the New Zealand Chinese Building Industry Association (NZCBIA), the New Zealand International Building Expo & Summit (NZIBES) has grown over several years into one of the largest annual events in New Zealand’s construction and property industries. In 2022, NZIBES set its goal as “North and South working together for shared success” (Collaborate UP for our industry’s shared success). It fully realised that goal with its South Island debut on 14 October, holding the 2022 NZIBES South Island Summit in Christchurch, the island’s largest city.

From the themed summit sessions to the gala dinner, the event offered a packed programme full of highlights. New Zealand’s Minister of Housing, Building and Resources, Megan Woods, and Zhai Xingfu, Deputy Consul-General of China in Christchurch, attended and delivered speeches. Industry leaders and professionals from both islands, including investors, developers, designers, planners and contractors, gathered to discuss industry trends. Topics included insights into Christchurch’s property market, analysis of Central Otago’s property market and investment opportunities, and medium-density housing development in Christchurch. Fifteen construction and property brands from across the North and South Islands also showcased their products and services at the summit.

 

Frank Xu: the medium-density housing era has arrived

 

New Zealanders have traditionally lived in low-density housing or high-density city-centre apartments, and the property and construction industries have developed around those patterns. Today, urbanisation and population growth are forcing people to seek new housing options that are more affordable, more convenient and better connected to nature and communities. The COVID pandemic has intensified this trend, and demand for medium-density housing in New Zealand’s major cities is expected to rise sharply over the coming years.

In his welcome address, NZCBIA President Frank Xu identified three issues of particular importance to today’s construction industry: the medium-density era, technology and sustainability. He explained that urbanisation and population growth mean we are already living in an era of medium-density housing. Figures show that consents for multi-unit homes have exceeded those for new standalone houses for three consecutive months: a new era has arrived. Frank Xu predicted that medium-density housing would become more attractive to buyers and increasingly common in the market, with demand rising sharply.

For industry professionals, including investors, developers, architects, lawyers, urban planners and contractors, the medium-density era undoubtedly brings new opportunities and challenges across industrial supply chains, materials supply, design and construction standards, and workforce upskilling.

Frank Xu said we must ensure medium-density homes are high-quality homes. The quality of the projects, products and technologies he had seen at the expo made him optimistic about the future. He also addressed sustainability: “In my view, as their market share grows, market leaders have a duty to take greater responsibility for industry issues. For us, those issues are sustainability and diversity.” He sees sustainability as an opportunity to create value for products, rather than a cost that must be paid.

 

Megan Woods: Chinese businesses play a vital role

 

New Zealand’s Minister of Housing, Building and Resources, Megan Woods, began her speech by acknowledging the Chinese community’s significant contribution to the construction industry. She said: “Chinese businesses and professionals play a vital role throughout the industry, in development, planning, supply and construction.”

In October 2021, New Zealand’s two parties made a rare joint appearance to announce new housing policies, including the Medium Density Residential Standards, to ease approval processes and accelerate increases in residential density. At the time, Minister Megan Woods noted: “The housing crisis is a problem that has built up over decades, and solving it will take time... Housing shortages are particularly severe in our major cities because of restrictions on the number and types of homes that can be built.”

At the 2022 NZIBES South Island Summit, Minister Megan Woods also shared her views on these issues. She said: “The new housing policies we are implementing are all about enabling more affordable homes to be built to meet New Zealanders’ needs. One way to achieve this is through greater urban intensification. Increasing urban density is vital to expanding housing supply and improving affordability. Intensification, particularly in well-connected areas, also offers further advantages, including social benefits, as residents have better access to jobs, community services, infrastructure and more. Shorter journeys also bring environmental benefits and allow more efficient use of infrastructure.” Megan concluded by saying that, overall, we are working to build a thriving, fair and sustainable construction industry while increasing urban density. Realising that vision, however, requires everyone in the industry to work together.

 

Jim Davis: Christchurch is the fastest-growing area outside Auckland

 

Harcourt South Island Regional Manager Jim Davis shared recent Christchurch market data at the summit and highlighted several distinctive features of the local market:

• The fastest-growing area outside Auckland
• Relatively affordable housing
• One of the most liveable cities
• Christchurch’s recent median house sale price was NZ$685,000
• Around 8000 consents were approved in the 12 months to October 2022, indicating a relatively positive development trend

 

Jim Davis also shared current property development trends in Christchurch: small apartments and townhouses with 1–2 bedrooms are currently in favour. Looking further ahead, three-storey townhouses, single-level apartments and mid-priced homes are expected to become the trend. We also need to consider who the main buyers will be in future and the housing needs of older people, including the difficulties that homes with stairs can present.

 

Toby McDonald: challenges, opportunities and the future of the South Island construction market

 

Toby McDonald, Senior Quantity Surveyor and South Island Regional Manager at well-known New Zealand cost management and quantity surveying firm Maltbys, used crane numbers as a starting point to analyse the country’s construction market. He told the summit that New Zealand currently had 148 cranes nationwide, of which 23 were in the South Island, representing just 15% of the total. The imbalance in construction industry development between the two islands was clear.

Toby identified construction costs and inflation as the industry’s main challenges. Many people wanted to know where inflation was heading, he said, but the answer was uncertain. What was clear was that there were no signs of easing in construction materials price increases, and steel became more expensive the further south it was supplied. Labour shortages persisted, with many experienced quantity surveyors and project managers heading to Australia for work. Natural conditions in the South Island, including cold weather, rock and sloping terrain, also affected construction methods and project management.

Alongside the current challenges and difficulties, Toby outlined opportunities in the market. First, Queenstown’s house prices had remained stable while prices were falling across New Zealand. Second, many dual-income households had moved to the South Island in recent years, increasing demand for supermarkets, logistics, retirement villages, healthcare, retail and schools. Local councils also had growing infrastructure needs, including urban landscaping, streetscapes and other public facilities. All of these represented valuable opportunities for the construction industry.

 

Ron Gloag: insights into Central Otago’s property market

 

Ron Gloag is an experienced property investor who previously held senior management roles at insurance companies including AMI and IAG, and now runs a property management company. At the South Island Summit, Ron focused on investment opportunities in Queenstown and Otago.

Ron first identified several key factors behind Queenstown’s high house prices: limited land, high construction costs, intense competition, a large number of holiday homes, strong capital growth and a safe living environment. He also analysed property development in popular Queenstown locations including Ladies Mile, Park Ridge, Woolshed Road Housing and Jacks Point Village.

Wānaka is another South Island location with high house prices, for broadly similar reasons to Queenstown: high construction and labour costs, outstanding scenery, a safe and comfortable living environment, and popularity with wealthy buyers, all contributing to strong capital growth.

Cromwell is also a very popular location. Alongside the factors outlined above, it appeals strongly to motorsport and boating enthusiasts. Its agricultural and industrial development, together with strong population growth, are also key reasons for its increasing popularity.

 

Christina Yin: Homehopper’s grand South Island launch

 

The Homehopper property customisation centre made its debut at NZCBIA’s mid-year reception in July 2022. At this NZIBES South Island Summit, Homehopper was formally introduced to industry colleagues in the South Island. 

Homehopper Operations Director Christina Yin said a current market problem was New Zealand’s lack of a one-stop centre for smart home displays, sales and customisation services. Developers spend considerable time and effort finding reliable product suppliers and service providers, while construction costs are high and market offerings are largely alike. Homebuyers spend substantial time gathering information and researching the market, yet still struggle to find the property they want. Homehopper was created to meet these needs. Guided by market demand, it offers precisely targeted, in-depth support and professional, customised services in one place, tailored to the differing needs of homebuyers, investors, developers and service providers.

 

The industry dinner on the evening of 14 October attracted more than 200 guests. Zhai Xingfu, Deputy Consul-General of China in Christchurch, attended and delivered an address. Gold sponsor PlaceMakers also held several prize draws, which were enthusiastically received. In the spirit of “building together”, NZIBES provided an effective networking platform for construction and property businesses and professionals.

In today’s New Zealand property market, gaining clear market insights, understanding industry developments and building connections more widely have become urgent priorities for every industry professional.

As one of the largest annual events in New Zealand’s construction and property industries, the New Zealand International Building Expo & Summit (NZIBES) provides an effective networking platform. We look forward to seeing you in 2023!