Taupo’s residential building consents rise 45%

The release by Enterprise Great Lake Taupo of the March 2016 quarterly economic report shows that the local economy continues to grow steadily, with many indicators back at similar or higher levels to the pre-Global Financial Crisis period.

One of the most promising indicators that’s a clear contributor to regional growth is the sharp spike in new residential dwelling building consents.

“The level of building activity fell steadily over 2011 to 2013 but has since recovered sharply overall, and by 45% over the latest March year,” said Enterprise Great Lake Taupo Chairman, Greg Stebbing. “The value of the new residential construction activity consented over the last year totalled just over $85 million, compared to $61 million for the previous year. That’s great news for our building trades and suppliers.”

Similarly, Commercial-Industrial activity has also bounced back, with building consents up 15.8% against last year. The total value of consented new commercial-industrial building over the past six years is $61.3 million, with the bulk of this spent in construction of industrial-storage buildings.

“The other big jump is in the volume of total house sales,” said Mr Stebbing. “Whilst the median house price in the district was only up 0.7% against last year, total house sales were up 59% against last year. It is great to see the housing market flourish, and indicators would suggest that property values are still rising.”

Renowned financial commentator, Bernard Hickey, was in Taupo on Friday to present to local business owners and managers, and his assessment of the Taupo economy in a New Zealand context supported the findings in this recent economic report.

Mr Hickey shared a number of viewpoints on the short and long term outlook for New Zealand and challenged the preconceptions of the audience about the current state of our economy.

“Bernard encouraged us to carefully look at the tourist potential of the Chinese market, and to ensure that we have the necessary product and infrastructure in place to support this rapidly growing visitor group,” said Mr Stebbing. “With a forecasted 200 million individuals leaving China to travel by 2020, we need to be working on developing our tourism infrastructure and this is something that we’re working alongside the Board of Destination Great Lake Taupo on.”

Summary of the positive economic changes (Taupo District Economic Monitor March Quarter 2016 Report excerpt):

• Noticeable gains in total population and overall net population migration into the District.

• Significant growth in the volume and value of consented new residential building.

• Additional commercial-industrial building activity which was most apparent in the factory/industrial buildings sector.

• Increased volume and value of building alterations.

• Increased volume and value of retail spending, house prices, median housing rentals and motor vehicle registrations.

• An increase in commercial visitor arrival numbers & night-stays, ‘average length of stay’ and total direct visitor spend.

• Overall, real economic activity/ GDP growth of an estimated 2.3% was recorded for the Taupo District for the March 2016 year. This compares with the estimated 2.4% national growth rate for the year.

• The local economy has been performing positively overall during the past six years although annual rates of economic growth in the district have been somewhat fluctuating.

• District employment grew by 1.9% over the March 2016 year whilst unemployment fell by 6.3%. The rate of unemployment fell from 4.8% down to 4.4%.

• The latest New Zealand Institute of Economic Research Consensus Forecasts, prepared in March this year, are anticipating 2.6% average annual economic growth for New Zealand as a whole for the year ended March 2017, compared to the figure of 2.2% for the year ended March 2016.

• Taupo District will continue to look to its key industry strengths of pastoral farming, forestry and logging, manufacturing of wood products, geothermal energy generation and application, and the visitor/ events sector, to continue to drive further economic growth and development in the district over the coming year.

• Dairy industry export receipts nationally are forecast to recover significantly by over 30% during the coming year. Meat and wool receipts are forecast to increase around 6%. Forestry exports are forecast to increase 9%. Horticultural export receipts are forecast to increase 7% over the coming year. Whilst the ANZ Bank’s international commodity price Index has dropped back noticeably since 2014, nevertheless, the Index has been on an underlying long-term increasing trend since 2000.

To read the full Economic Monitor for the March 2016 quarter, or view Bernard’s full presentation, visitwww.greatlaketaupo.biz.

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