Built on power
As construction costs reset under global energy pressure, residential property purchasers are turning toward certainty and the enduring value of existing homes.
RAY WHITE NEW ZEALAND
There is a tendency in property markets to look inward for answers – interest rates, migration, sentiment.
However, the next shift in New Zealand’ s housing market may be coming from much further afield, and from something far more fundamental: energy.
Rising fuel prices linked to escalating tensions in the Middle East are beginning to ripple through global supply chains. For construction, one of the most energy-intensive industries in the economy, the implications are profound.
As Auckland University of Technology( AUT) Professor John Tookey puts it,“ Construction is unique in that it requires huge amounts of energy to form construction materials.
“ Things as simple as bricks, plasterboard, aluminium, in addition to the huge amounts required to transport them.”
“ Construction is unique in that it requires huge amounts of energy to form and transport construction materials.”
John Tookey, AUT Professor of Construction Management
Tookey says we’ re not talking about a marginal cost pressure – but a structural shift with lasting consequences.
From aluminium smelted using gas from Middle Eastern oil fields, to plastics, steel and bitumen- the oil-based binder used in roads and infrastructure- the modern building process is deeply embedded in global energy systems.
When those systems are disrupted, costs do not simply rise; they reset.
“ Oil production is down, that is production capacity that is out for two or three years more,” says Tookey.“ This is not going away soon. Construction costs are going to spike, and stay that way or escalate further.”
He says early signals are already emerging.
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