Glass houses: Industry revenue is set to decline as interest rates rise, constraining demand

Robust investment in new residential buildings has underpinned the New Zealand economy over the past five years, and assisted the House Construction industry's strong performance. A combination of factors have driven accelerated growth in housing investment, including stronger population growth stemming from an increased migrant intake, and mortgage interest rates declining to historically low levels. Investment in the reconstruction of Christchurch following the 2011 earthquake has also underpinned the industry's performance.Industry revenue is expected to increase at an annualised 6.5% over the five years through 2019-20, to reach $14.8 billion. However, the pace of revenue growth is projected to slow to just more.

Industry Statistics & Market Size
Annual Growth 15-20
Forecast Growth 20-25
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Reconstruction in the Canterbury region and favourable economic conditions have driven industry revenue growth
  • Government subsidies for first home buyers have been fuelling investment in housing
  • Mortgage interest rates are forecast to trend upwards and constrain housing construction activity
  • Industry Report - Starting a New Business Chapter

    The industry’s main barrier to entry for new competitors is the licensing requirements for undertaking much of the work involved in housing construction, notably foundations, framing, roofing and cladding of new and existing buildings. Work that is critical to building integrity must be undertaken by, or certified by, a licensed building practitioner.Licensing is restricted to tradespeople that have completed trade qualification equivalent or better than National Trade Certificate in Carpentry Level 4. Qualified tradespeople have easy access to the industry. However, new entrants are likely to have difficulty competing with existing players due to their lack of proven experience, and the difficulty in gaining professional recognition and obtaining insurance...purchase to read more.

    Additional Insights for the House Construction Industry

    IBISWorld has determined the most important Key Success Factors for the House Construction are:

  • Membership of an industry organisation
  • Having good working relationships with subcontracting building trade specialists
  • Having a good reputation
  • IBISWorld analysts also discuss how external factors such as Capital expenditure on residential buildings and Population in the House Construction industry impact industry performance..

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    What's in this report

    What is the House Construction in New Zealand Industry?

    The industry consists of companies that mainly construct houses (excluding apartments and townhouses) or carry out alterations, additions, renovations or general repairs to houses. It also includes operators that organise and manage these activities as the prime building contractor.

    Industry Products
  • New housing construction
  • Housing alterations, additions and improvements
  • Housing repairs and maintenance
  • Other services
  • Industry Activities
  • House construction
  • House alteration, renovation and general repair
  • Prefabricated house on-site assembly, erection and installation
  • Garage construction
  • Project management
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Capital expenditure on residential buildings
  • Population
  • Residential housing loan rates
  • Dwelling consents issued
  • Mortgage affordability
  • Residential housing prices

  • Current Performance
  • Demand for housing
  • Housing preferences
  • Christchurch reconstruction
  • KiwiSaver boost
  • Profit and participation
  • Chart: Revenue Growth

  • Industry Outlook
  • Participation and profitability
  • Slower population growth
  • Demand constraints
  • Table: House Construction Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - House Construction Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Superannuation Funds in New Zealand
  • Banking in New Zealand
  • Consumers in New Zealand

  • Key Selling Industries
  • Agricultural and Construction Machinery Wholesaling in New Zealand
  • Hardware Wholesaling in New Zealand
  • Heavy Machinery and Scaffolding Rental and Hiring in New Zealand
  • Site Preparation Services in New Zealand
  • Timber Wholesaling in New Zealand

  • Products & Services
  • New housing construction
  • Housing alterations, additions and improvements
  • Housing repairs and maintenance
  • Other services
  • Chart: House Construction Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Second and subsequent homebuyers
  • First home buyers
  • Property developers and speculators
  • Public sector
  • Chart: Major Market Segmentation for the House Construction Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs House Construction

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the House Construction Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the House Construction Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the House Construction Industry
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Marketing (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Building Consent
  • Consents are granted by councils before construction can proceed to ensure compliance with the Building Code.
  • Kiwisaver Homestart
  • A grant paid to eligible first home buyers to contribute to the deposit on a home. The grant is dependent on contributions to the national voluntary long-term savings scheme, KiwiSaver.
  • Mortgage
  • A legal contract through which a financial institution (bank, building society etc.) lends money at interest in exchange for holding the title on the borrower's property.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s House Construction in New Zealand market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on House Construction in New Zealand:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The House Construction in New Zealand market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on House Construction in New Zealand, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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