1. Building and Construction Industry—Building Activity and Auckland Housing SupplyALASTAIR SCOTT (National—Wairarapa) to the Minister of FinanceWEDNESDAY 12 APRIL 2017Mr Deputy Speaker took the Chair at 2 p.m.Prayers.ORAL QUESTIONSQUESTIONS TO MINISTERSBuilding and Construction Industry—Building Activity and Auckland Housing Supply1. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: How is the construction sector contributing to New Zealand's economic growth?Hon STEVEN JOYCE (Minister of Finance): In both Auckland and across New Zealand we are in the middle of our largest ever construction boom and housing growth is a very big part of that story. Activity in the construction sector rose 1.8 percent last quarter and was up 10.5 percent for the year to December 2016. This annual rise in construction activity was the highest since 2004. Confidence in the construction industry remains strong with a net 23 percent positive rating for commercial construction and a net 25 percent positive rating for residential construction. All signs indicate a heightened level of construction activity for some time into the future.Alastair Scott: How is this heightened level of construction activity flowing through into consents and real estate listings?Hon STEVEN JOYCE: Residential building consents posted their biggest monthly gain in 8 months in February. New housing permits jumped 14 percent dwelling consents also rose 14 percent and annual new house consents gained 9.1 percent in the year. There is also promising news for home buyers across New Zealand. Real estate listings for March were up 10 percent on the year before and Real Estate Institute of New Zealand data showed Auckland's median price was down 5 percent from 6 months ago and unchanged from 9 months ago. While we should not yet read too much into these figures I again would underline that potential house buyers should think carefully about their price and interest rate expectations.David Seymour: In what possible world would growth in the construction sector not be related to growth in consents in new house listings?Hon STEVEN JOYCE: I think that is exactly my point. The level of construction activity and ongoing levels of consent activity indicate a very large construction pipeline under way not just in Auckland but across the country.Grant Robertson: What is the latest advice he has on the shortfall of houses in Auckland? Is it closer to 30000 40000 or 50000?Hon STEVEN JOYCE: It all depends on for example the number of people per dwelling and the level of activity in terms of construction and it does change quite dramatically. For example we have 2770 apartments due to be completed this year and a record-breaking 3840 next year—that is according to Colliers. So people can debate all they like about shortages but the reality is that the supply response is very strong.Alastair Scott: How is the Government supporting councils to facilitate residential developments?Hon STEVEN JOYCE: The Government is continuing to support local councils to deliver the infrastructure required to service new residential developments including through the $1 billion Housing Infrastructure Fund where assessments are currently being made in terms of projects that would qualify for support. Additional Government measures to speed up medium-term housing supply include fast-tracking the Auckland Unitary Plan the new national policy statement on urban capacity and the proposed urban development authorities legislation. That will ensure that the current record construction boom will continue.Alastair Scott: What effect is access to credit having on new residential developments?Hon STEVEN JOYCE: It is a very fair question. Banks and other lenders are experiencing strong demand for property development financing currently. Banks continue to manage their exposure across the sector. The Reserve Bank is expecting that current levels of bank funding will be sufficient to maintain construction activity at the present rate for some time. That level of construction is of course illustrated by a number of things including the record 132 cranes operating across our main centres in construction sites. In Auckland alone there are 72 cranes—Phil Twyford: Where are the houses? Forget the cranes—can't live in a crane.Hon STEVEN JOYCE: —working on residential and commercial projects and I think Mr Twyford you will find that the houses are under the cranes.