Simon Felton, an investment property specialist at Colliers International, believes that multifamily units or apartments could be a solution for a housing crisis in New Zealand. However, the demand for such properties would mean a bigger need for construction workers.
This likewise means civil engineering services will be more in demand in the country due to the expected increase in the number of multifamily properties for rent.
Felton said that the multifamily sector has become an attractive asset class for Kiwi investors, as it taps into the demand for homes with a potential to earn profits. The model has been a viable investment structure in other countries, such as the U.S., where transactions amount to more than NZ$137 billion each year.
Civil engineering work will be relevant to achieve a suitable design and building structure for projects, particularly in cities such as Auckland. The market currently has a limited supply of rental properties, which then contribute to high prices. A shortage of workers likewise affects the number of constructed units for rent, as the industry would need to recruit and train more people by 2022.
Skilled Labour Supply
The Ministry of Business, Innovation and Employment (MBIE) said that at least 50,000 construction workers and tradesmen would be needed in the next four years. The problem does not involve a shortage of job openings, but rather a lack of skilled personnel, according to Anna Clark, MBIE system strategy and performance manager.
A boom-bust cycle, which happens when demand peaks before declining, makes it difficult to determine the number of workers needed for construction plans. Still, the industry would need more workers given that multifamily projects are expected to increase in the future.
Multifamily properties are a relatively new concept in New Zealand. That said, developers should work with civil engineers and architects carefully to find the most cost-efficient way to build these properties whilst maintaining compliance with certain industry standards and regulations.