Impact of COVID-19 on residential building sentiments in Auckland

Builders, developers, and owners of home building projects in Auckland said they felt more affected by COVID-19 than those working on non-residential projects and projects outside Auckland, Stats NZ said today.

Just over 3,500 respondents recently answered a series of questions in the quarterly building activity survey. Based on our analysis of the opinions given by respondents about the effect of COVID-19 on building projects (which may not be representative of all building projects), around 6 out of 10 respondents from residential projects in Auckland reported a moderate to severe COVID-19 impact in the September 2020 quarter. This compared with fewer than 5 out of 10 respondents from residential building projects outside Auckland reporting a moderate to severe impact. Nationally, relatively few projects of any kind (fewer than 1 in 20) reported severe impacts in the September 2020 quarter.

“Auckland spent more time at higher alert levels than the rest of New Zealand during the September 2020 quarter, which may partially explain why some of the survey respondents expressed greater perceived impacts of COVID-19,” construction statistics manager Michael Heslop said.

During the quarter, Auckland moved into COVID-19 alert level 3 for part of August and was at alert level 2.5 for part of September.

“The results in the September 2020 quarter may also reflect some of the ongoing effects of the alert level 4 lockdown in the June 2020 quarter. Previous insights have shown significant delays to completion dates were anticipated, although there will be some projects that have been catching up,” Mr Heslop said.

The value of building work put in place in Auckland in the September 2020 quarter appears to have bounced back from a dip in the June 2020 quarter, despite Auckland being at higher alert levels than the rest of the country.

Non-residential projects outside Auckland, including commercial buildings like offices, reported a lower impact on average in the quarter as a result of COVID-19.

COVID-19 Perceived ImpactNon-residential (Auckland)Non-residential (NZ excluding Auckland)Residential (Auckland)Residential (NZ excluding Auckland)
None19251321
Small36342934
Moderate30303630
Major11101812
Severe4243

Different impacts on building projects

The survey also asked about the ways in which COVID-19 impacted building projects.

Around 8 out of 10 respondents working on residential building projects in Auckland reported that they had experienced an impact in at least one of the five categories available (cashflow, cost, availability of labour, availability of materials and equipment, and on-site productivity). More respondents from residential and non-residential building projects in Auckland expected increased costs than respondents from similar building projects outside Auckland. More respondents from residential projects in Auckland also expected problems getting labour than respondents around the rest of the country.

Non-residential (Auckland)Non-Residential (NZ excluding Auckland)Residential (Auckland)Residential (NZ excluding Auckland)
Cashflow39294733
Cost54376038
Labour40355539
Materials44425751
Productivity60506954

In some cases, stand-alone house projects were affected slightly more than other types of homes, such as townhouses.

Expected impacts of COVID-19 in December 2020 quarter

The expectations for the impact of COVID-19 in the December 2020 quarter appeared to be less severe than the reported impact in the September 2020 quarter.

Respondents for residential projects in Auckland were expecting the impact of COVID-19 to be greater in the upcoming quarter than for those working on non-residential projects and projects outside Auckland.

COVID-19 Expected Impact (December 2020 quarter)Non-residential (Auckland)Non-residential (NZ excluding Auckland)Residential (Auckland)Residential (NZ excluding Auckland)
None52593549
Small33283533
Moderate10102214
Major3363
Severe2120

These results are based on the perceptions of respondents and reflect the respondents’ expectations. Given the uncertainty surrounding COVID-19, these perceptions may change in coming months. We advise caution when making decisions based on these insights.

Feedback

For upcoming Value of building work put in place releases, Stats NZ hopes to improve on the data it captures and the insights that are shared.

Stats NZ welcomes your feedback on the current, and possibly future, work on COVID-19’s impact on the construction industry. You are encouraged to comment on:

  • how useful this information is to you
  • how you might use this information
  • any other information you would like included
  • any enhancements that would make these estimates more useful
  • any other suggestions for improvement.

To send your feedback or if you have a technical enquiry, please contact Michael Heslop at michael.heslop@stats.govt.nz or Adriaan Lotter at adriaan.lotter@stats.govt.nz.

COVID-19 alert level timeline and implications for construction

All non-essential work stopped during the alert level 4 lockdown. Construction was allowed to continue at alert level 3 and below, although each level had its own requirements and implications.

For information on COVID-19 and construction see the COVID-19: Building and construction sector guidance from the Ministry of Business, Innovation and Employment (MBIE).

Alert level calendar March 2020 – September 2020

19 March 2020 11:59pm: New Zealand’s borders closed to almost all travellers, except for returning New Zealanders.
21 March 2020: New Zealand enters COVID-19 alert level 2.
23 March 2020 1:30pm: New Zealand enters COVID-19 alert level 3.
25 March 2020 11:59pm: New Zealand enters COVID-19 alert level 4.
27 April 2020 11:59pm: New Zealand enters COVID-19 alert level 3.
13 May 2020 11:59pm: New Zealand enters COVID-19 alert level 2.
8 June 2020 11:59pm: New Zealand enters COVID-19 alert level 1.
12 August 2020 12:00am: New Zealand (excluding Auckland) enters COVID-19 alert level 2, Auckland enters COVID-19 alert level 3.
30 August 2020 11:59pm: Auckland enters COVID-19 alert level 2 (with extra restrictions on travel and gatherings).
21 September 2020 11:59pm: New Zealand (excluding Auckland) enters COVID-19 alert level 1.
23 September 2020 11:59pm: Auckland enters COVID-19 alert level 2 (without extra restrictions on travel and gatherings).

Methodology

The insights shared here reflect the opinions of respondents to the quarterly building activity survey. A total of 3,519 building projects were included in this analysis. More than one-third of these projects were in Auckland.

Additional questions were included in the survey for the September 2020 quarter. These were included to better understand the perceived impacts of COVID-19 on building projects, and the ways in which building projects have been impacted.

These insights do not reflect any information around how survey respondents may be responding to COVID-19 and its effects, or how their perceptions relate to the value of building work put in place. The effects of COVID-19 are varied and often project-dependent, and results may change over time as circumstances and perceptions change.

/Stats NZ Public Release. The material in this public release comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.