Cordell Building Indices
Cordell New Housing Index Price (CHIPS) New Zealand | December 2018
Contents Introduction to the Cordell Building Indices
3
Key Components
3
Cordell Housing Index Price
4
New Zealand CHIP
5
CHIP & Consumer Price Index (CPI) Figures
6
CoreLogic Housing Index Prices New Zealand December 2018 | 2 Š Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
Introduction to Cordell Building Indices
Key Components
The Cordell Building Indices (CBI) are a series of construction industry index figures that are used to monitor the movement in costs associated with building work within particular segments of the industry.
The indices are based on a comprehensive collection of labour, material, plant hire and subcontract costs covering all major trade categories within the segment being measured.
The CBI indicates the rate of change in prices within particular segments of the New Zealand construction industry.
Each of the trade categories contains labour, material and plant hire costs combined in typical proportions required to construct the various types of buildings commonly found within each segment.
The changes in prices are measured daily through the use of detailed cost surveys, and are reported on a quarterly basis. This ensures the most current and comprehensive industry information available. Each index is based on a combination of labour, material, plant hire and subcontract services required to construct buildings within the particular segment being measured. The CBI measures the change in the cost of constructing buildings, and as such do not provide the actual costs.
CoreLogic Housing Index Prices New Zealand December 2018 | 3 Š Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
Cordell Housing Price Index The Cordell Housing Index Price (CHIP) measures the rate of change of construction costs within the residential market and covers freestanding and semi-detached single and two storey dwelling homes. The key categories within the CHIP index include: Preliminaries
Excavation and Concrete Work
Brickwork
Carpentry and Joinery
Roofing Insulation and Roof Plumbing
Windows and Glazing
Doors and Hardware
Plastering
Painting and Tiling
Plumbing and Drainage
Electrical Services
Sundry Appliances
CHIP Trade Breakup 25%
20%
15%
10%
Doors & Hardware
Windows & Glazing
Electrical Services & Sundry Appliances
Plastering
Painting & Tiling
Brickwork
Plumbing & Drainage
Roofing Insulation and Roof Plumbing
Preliminaries
Excavation & Concrete Work
0%
Carpentry & Joinery
5%
CoreLogic Housing Index Prices New Zealand December 2018 | 4 Š Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
New Zealand Q4
125.7%
1.3%
4.6%
December New Zealand CHIP Index
Quarterly Growth
Annual Growth
In nominal terms, the CHIP index rose 1.3% in the fourth quarter of 2018. This was the first lift above 1.1% in the quarterly nominal growth in the index since September 2017. The index demonstrated a period of rapid growth over 2017, culminating in a 6.9% nominal increase in the cost of house construction over the year. Real growth in the index over 2017 was a staggering 5.2%, against a fairly subdued inflationary environment experienced in the New Zealand and global economy. In the December quarter, the nominal annual growth rate held at 4.6%. Statistics New Zealand building activity data suggests that demand for dwellings in New Zealand remains strong. According to CoreLogic Buyer Classification data, this is driven by continued demand from both multiple property owners (comprising 37.1% of sales over the quarter) and first home buyers (23.4% of sales). Trend data of new dwellings consented across New Zealand shows a 3.0% increase over 2017. Demand continued to grow throughout 2018, with trend data up to the end of November 2018 indicating annual growth of 6.5%.
While residential building has been the main growth driver in New Zealand’s construction industry over 2017 and into 2018, the rate of growth is slowing. Meanwhile growth in the non-residential building sector has also shown increased demand over this period. Alongside a 6.8% annual increase in the value of residential building work up to the end of Q3 2018, the value of work done in the non-residential sector increased 6.9%. There are signs of a flattening off however, with rolling annual growth in concrete production below 2% for all of 2018 (after peaking at 16.9% in Q1 2015). It is possible that the continued growth in the New Zealand CHIP index is partially driven by the increased dwelling demand and construction, with intensifying capacity constraints in the construction industry putting pressure on building inputs such as labour and material. Above-average appreciations in the cost of house builds may continue, given that investment demand remains high, and the number of dwellings consented continues to increase. In addition to investment demand, government initiatives such as Kiwibuild and increased infrastructure investment are also bolstering activity in the construction sector.
CoreLogic Housing Index Prices New Zealand December 2018 | 5 Š Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
New Zealand CHIP & Consumer Price Index (CPI) figures Based on 200m2 concrete slab, brick veneer, concrete tile roof house.
Year 2012 2013
2014
2015
2016
2017
2018
Months
NZ CHIP
NZ CPI
% Chg.
Index
DEC
0.0
100.0
% Year
% Chg.
Index
0.000
100.0 100.4
MAR
1.1
101.1
0.428
JUN
1.4
102.5
0.170
100.6
SEP
0.3
102.8
0.937
101.5
DEC
0.8
103.7
3.68%
0.101
101.6
MAR
0.4
104.1
2.99%
0.255
101.9 102.2
JUN
0.5
104.6
2.06%
0.304
SEP
1.2
105.9
2.98%
0.299
102.5
DEC
0.6
106.5
2.73%
-0.200
102.3
MAR
0.8
107.4
3.10%
-0.300
102.0
JUN
0.6
108.0
3.24%
0.400
102.4
SEP
1.0
109.1
3.03%
0.300
102.7
DEC
0.5
109.6
2.93%
-0.500
102.2
MAR
0.8
110.4
2.83%
0.200
102.4
JUN
0.3
110.7
2.52%
0.400
102.8
SEP
0.7
111.5
2.22%
0.300
103.1
DEC
0.9
112.5
2.62%
0.400
103.5 104.6
MAR
1.7
114.4
3.64%
1.000
JUN
1.9
116.6
5.30%
0.000
104.6
SEP
1.8
118.7
6.45%
0.500
105.1
DEC
1.1
120.2
6.87%
0.100
105.2
MAR
1.1
121.6
6.24%
0.500
105.7
JUN
1.0
122.8
5.32%
0.400
106.2
SEP
1.1
124.1
4.55%
0.900
106.2
DEC
1.3
125.7
4.58%
CoreLogic Housing Index Prices New Zealand December 2018 | 6 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
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