Building upswing puts end to slump

03:08, Jan 31 2013

Nelson’s building industry has done a turnaround, picking up from the rock bottom it hit last year.

A year ago Registered Master Builders Federation (RMBF) Nelson president Alistair Middleton said he did not think the downturn, which was in its third year, could get any worse, with work having dried up in new house starts and commercial projects.

Then, consents were issued for just 14 new home builds in Tasman and 9 in Nelson.

Now, latest figures show that last month 24 were issued in Tasman worth $6.1 million and 18 in Nelson worth $4m. The previous month it was 36 in Tasman and 21 in Nelson.

RMBF chief executive Warwick Quinn said the industry was expecting a gradual pickup. It had been patchy over the past year with some months up and others down, but ntsGitntehe  was expecting it to be better this year.

He said the latest building consent figures confirmed expectations that the Canterbury and Auckland regions would lead the residential building recovery while activity in the rest of New Zealand might remain weak, perhaps for some time.


Statistics New Zealand figures show nationally 1381 new homes and apartment consents were issued last month, a 23 per cent increase on December 2011. The total new residential consents for last year were 16,929 compared with  13,662 the previous year, reflecting a 24 per cent increase.

Mr Quinn said Auckland and Canterbury ntsGregionsnte made up half of those.

They were the only regions that had rising prices which generated greater levels of building activity to meet a shortfall in supply. The rest of New Zealand had flat property prices and thus similar levels of building activity, he said.

In Nelson it would still be tight this year, with builders keeping an eye on costs, and work would be competitive, he said.

Mr Quinn said New Zealand should be building 20,000 to 25,000 new homes a year to maintain its housing stock and population growth but had been well below those levels for the last five years.

‘‘While we will see more new residential consents issued again in 2013 it is not on the back of a strong economy but in response to housing problems in our two biggest cities.’’ The long-term battle was over land supply, he said.

In the wake of the Government announcing apprenticeship incentives, Building and Construction Industry Training Organisation chief executive Ruma Karaitiana said that in Auckland it was seeing a 70 per cent increase in employers looking for apprentices compared with the last quarter.

‘‘The construction industry needs as many people as it can get right now. Building work in Christchurch and Auckland is really kicking off and we expect this demand will stay for quite some time,’’ Mr Karaitiana said.

Nelson was traditionally a reasonably strong construction area but at the moment the only region where strong recovery signs were being seen was Taranaki, he said.  However, it was expected ntsGthenteother  regions would also become busier.

He did not believe the Christchurch rebuild would attract many workers from Nelson.

‘‘One of the things we have learnt from Christchurch is not everyone wants to go there,’’ said Mr Karaitiana.   ‘‘We haven’t seen thousands of people rushing off to Christchurch.’’

Many preferred to stay at home where they had different commitments, he said. While Christchurch pay rates might be higher, they were not huge.  ‘‘The increased remuneration in Christchurch also comes with increased costs.  It’s very challenging to find accommodation, it’s not available and when it is, it’s very expensive.

‘‘While there were individuals and firms from Nelson involved in the Christchurch rebuild I don’t think they are huge numbers and as the local economy picks up they may return home.’’