Demand for tradies for home improvement work surges

Friday, 6 December 2024

There has been a 30% lift in demand for general residential building-related jobs, Buildercrack data shows.

Home improvement work is back on peoples’ agenda with a 30% leap in demand for tradies after months of limited activity in the sector, Builderscrack says.

The country went through the biggest renovation boom in decades in 2020 and 2021 as home owners unable to travel spent up large on their properties.

But rising interest rates and the cost of living crisis put the brakes on the boom, and led to a decline in demand for tradespeople in the “homeowner-managed projects” space.

Some building and tradie companies have not survived the downturn, with high profile busts frequently making it to the news. But, those that have survived are having a different experience. Builderscrack has reported a big surge in demand for tradespeople in the home repairs, maintenance and improvement space over the last four to five months.

Data from the tradie job platform revealed a 30% lift in general residential building-related projects from June to October.

Builderscrack’s Jeremy Gray says people’s reluctance to spend on home improvement is thawing.

Demand for tradespeople for non-essential, discretionary jobs was also up significantly, and there was a 50% increase in paving and driveway projects, the data showed.

Builderscrack spokesperson Jeremy Gray said people’s reluctance to spend on their homes seemed to be thawing as interest rates declined and the housing market stabilised.

Some people might be getting their homes ready to put on the market for sale, while others might be at the end of their tolerance around not doing any work to their home when it was needed, he said.

“It means job volumes are up, but people are still being cautious about how they spend.

“So with bathrooms and kitchens we are seeing simple, decorative refreshes, involving lighting, repainting, and flooring work, rather than full renovations and rebuilds.”

The increase in paving and driveway projects, which were a classic discretionary improvement category, could reflect plans to sell, he said.

“They are often street appeal projects, and they are usually reasonably high expense jobs. There are not high numbers of them, but the lift in requests for them is significant.”

Bathrooms are getting simple, decorative refreshes rather than full renovations, Gray says.

Demand for tradies to do work tapered down as the official cash rate lifted, and hit a real low about 12 months ago, he said.

“While essential, non-discretionary work doesn’t drop off too much in tougher economic times, there does tend to be a drop in discretionary work, and it has been very quiet in that space.

“That was offset a bit by maintenance work over the quiet months. About six months ago demand started to pick up slightly, and that pick up has become pronounced over the last few months.”

Gray said it was a good sign for the market over the coming year, and he expected to see consents start to go back up, and a positive sentiment to become more evident.

“We're also seeing tradies more actively engaging with prospective clients and focusing on quality of service from speed of invoice turnaround to general comms.

“For those households who engage a tradie, they are generally having a great experience due to lower overall pressure in the sector at present.”

Combined Building Supplies Co-Operative represents about 1600 members, 90% of whom are builders while the rest are other tradespeople.

The global reach of a NZ home renovation company

The organisation’s chief executive Carl Taylor said he was hearing the market was still pretty flat, but that tradies’ spend on supplies had started to go up, and pre-cut orders were coming through more.

“So the market is showing some positive signs, but when talking to members it seems some have no work, while others have massive pipelines of work. It is a mixed bag out there.

“Right now, we are hearing that the traditional Christmas wind-down has come three weeks early this year, but the pipeline for next year is looking pretty good.”

The phones were starting to ring again, so he expected that next year, perhaps by mid-year, there would be quite high demand for tradies, he said.

Stats NZ’s latest consent figures were out on Monday, and they showed 33,467 new homes were consented nationwide over the year to October, a fall of 16% on the year to October 2023.

Westpac senior economist Satish Ranchhod said while consents remained low, the downturn in consents had found a base, with numbers effectively tracking sideways since the start of the year.

Over time, a combination of lower borrowing costs and a strengthening in the housing market would support new development, he said.

“But we don’t expect to see consent issuance turning materially higher until mid-2025, with a lift in construction activity to follow after that.”

CreditWorks is a credit reporting company which has the country’s largest trade database. In a new report, it said the trend in construction sector sales showed pipelines were being stretched to mitigate dwindling consent activity.

But it also said current annual sales remained above pre-Covid levels, and that October’s building merchant sales were up 11.5% from September, and 0.2% from the same time last year.