The construction industry is being warned that the boom might peak this year, despite the huge need for housing and infrastructure projects on the horizon.
Forsyth Barr analyst Matthew Henry is warning of a slowdown in residential building over the next 12 to 18 months and a flattening out of non-residential work, albeit from buoyant levels.
Henry believed house and land prices had reached such a high point that demand would soften.
That would combine with tightening finance from the banks, a sharp rise in mortgage rates, and the looming end of the Canterbury residential rebuild.
And there would be "a marked deterioration in the economics of building apartments".
Non-residential construction would also plateau as finance hurdles, skills shortages, and rising construction costs all came to bear.
Henry's views echo those of former Westpac economist David Norman - now chief economist with Auckland Council - who has been tipping the construction boom to peak in 2018.
Sense Partners economist Shamubeel Eaqub also told the Newsroom website last week that he believed the tide was turning on construction thanks to tightening credit.
The construction industry estimates it will need 50,000 new workers over the next five years.
The construction industry estimates it will need 50,000 new workers over the next five years.
"I fully expect a construction bust next year. We are going to have a construction bust before we have a housing bust," he said.
However, Warwick Quinn, chief executive of the Building and Construction Industry Training Organisation, said he found that hard to believe, given the work in the pipeline.
It was more likely building levels would level out at high levels.
"The sector is pretty confident that there is a pretty good supply of work in front of us for a number of years."
Westpac's acting chief economist Michael Gordon said that while Christchurch was certainly slowing down, "the ultimate issue is that there are people who need roofs over their heads".
Tightening bank finance was an issue mostly for new apartments, not for proven builders of medium-density townhouses.
And worker shortages were a cyclical issue for construction. "It's not something that I think would see the level of work fall. It's a barrier to how quickly you can increase."
However, one recruitment agency said the acute shortage of skilled construction workers was definitely beginning to affect projects.
Peter Macauley, regional director of Michael Page NZ, said there were "a number of developments with consent and lending approvals that are being held back as there is a shortage of talent to manage the jobs".
Building firms were using "unparalleled" recruitment tactics, offering bonuses, fast-tracked career paths or pay rises of 10 to 20 per cent.
"Many property and construction professionals [are being] swayed by high-end utes, jobs that are close to home, type and profile of the project as well as higher salaries," Macauley said.
"Loyalty is not strong and candidates are typically being offered between 5 to 10 jobs so they can be very selective."
However, optimism in the construction industry is still high.
March's ANZ Business Outlook showing a net 25 per cent were positive about residential construction and a net 23 per cent in commercial, although confidence levels have been very volatile in the past two months.
Early indicators are that 2017 might become the busiest year for house building since the mid-70s, breaking 2004's record of 31,423 dwelling consents.
But Quinn said that 30,000 new homes was close to the historical average, "so it's not as if we're constructing well above what our normal rate is".
Dwelling consents are currently up a strong 8.5 per cent year on year, but the trend appeared to be softening, falling 11 per cent since last July.
Non-residential had also been trending lower in the past six months, and is down 2.7 per cent year on year.
Gordon suspected some of that drop reflected people holding back until the Auckland Unitary Plan was finalised in February.
"So we do expect the pace of building in Auckland to slow through the first half of this year, but then pick up strongly from the second half."
For building material companies, Forsyth Barr said the outlook was mixed. It downgraded Fletcher Building's share price to an "underperform" status, saying its current share price provided "limited insulation" against a further dent in sentiment.
The outlook for other listed building companies was less gloomy. Henry upgraded Steel & Tube's shares to "outperform," saying its current share price was attractive compared to the risks.
Metro Performance Glass was rated as neutral. It was the most sensitive stock to a slowdown in house building but its share price already reflected "an appropriately cautious view" on the earnings front.