Pull back in construction sector long time coming

“Just as prices reached strained levels so too has the level of construction and the number of consents being issued for new dwellings.” Those consent numbers are only now falling off – but largely for houses and not yet for townhouses.

The latest RBNZ report on the economy shows construction activity was incredibly strong in the third quarter, up 5.1%. And there's more in the pipeline - for a while at least. Investment in the construction space accelerated further in Q3, with residential building up 2.7% and non-residential up 4.7%.

However, Kiwibank says the report is old and construction will be one of the major swings south next year.

Alexander believes change will come during the summer. “There is a lot of weakness to come in the townhouse building sector and summer is going to bring many examples of building companies going under and projects being left half-completed with people losing their money.