New Zealand's building industry will expand at a record pace in 2014 and 2015, thanks to repairs and new construction after the Christchurch earthquake.

Building activity in Christchurch is expected to peak by 2015 after a ten year low in the aftermath of the 2011 earthquake according to economic forecaster BIS Shrapnel.

The level of building and construction is expected to taper off after this point however will remain above average.

Author and BIS Shrapnel senior project manager, Adeline Wong said:

“After it had languished at more than two-decade lows in recent years, we expect the Auckland housing sector’s growth to continue through the forecast period,” said Wong. “Existing pent-up demand and an expectation of a return to net overseas migration gains are expected to underwrite Auckland’s sustained and possibly protracted housing upturn over the outlook period.

Similar to the recent high density residential developments in Sydney, it is expected that Auckland first home buyers will also be straying from traditional homes and settling for apartments in inner city areas.

Wong added:

“A sizeable housing stock deficiency of 9,300 units has built up over the years, and we expect this deficiency to rise and remain at over 10,000 units over the next two years before it starts to decline to around 3,200 dwellings by 2018. However, we do not expect the city’s dwelling building activity to match the historically high levels in the early 2000s, as the high median house price there will act to constraint activity in the first home buyer market.”

It has also been predicted by BIS that the non-residential building sector will also receive a boost from the Christchurch reconstruction in the next five years

“The non-residential building sector over the next five years may get an extra lift from potentially wider earthquake strengthening work in office buildings and schools in Wellington in particular,” said Wong.

“However, there is also a downside risk to our forecasts in that the timing and scale of Christchurch reconstruction, and also seismic work in Wellington may not be as expected. Some owners of quake-damaged and earthquake-risk properties may not commit to redevelopment.”