Retirement village giant Summerset considers slowing down construction programme
Monday, 13 April 2026
The Post's Under The Pump is a new series investigating how the global fuel crunch is disrupting New Zealand businesses - but more importantly, how they’re planning to survive.
Retirement village giant Summerset Group may slow down its construction programme if building costs rise too high due to the war in the Middle East.
While the United States, Iran and Israel agreed to a two-week ceasefire on Wednesday, it is not certain the ceasefire will hold, and experts say the fuel crisis is not over yet.
At the same time, higher fuel prices were driving up costs in many sectors, with construction particularly vulnerable because of its reliance on freight and the presence of oil in many building materials.
Summerset chief executive Scott Scoullar said the company expected to see price increases flow through in the coming months if the conflict continued and fuel prices stayed elevated.
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But it had not seen any material increase in build costs across its developments at this stage, he said.
“A large portion of our current build programme was procured some time ago, and we also have multi-year materials supply agreements in place at set prices.
“We manage construction pricing through a combination of long-term supplier relationships, forward procurement where appropriate, and competitive tendering — and we’re still seeing good competition for tenders being let currently.”
Some stakeholders were raising higher build costs as a medium-term concern particularly as existing procurement rolled off and higher transport and input costs potentially fed through to pricing, he said.
“We are monitoring conditions closely, but we have a flexible build programme and we can make changes if we need to.
“If prices move beyond what we’re comfortable with we may need to adjust some of our builds, and that might mean slowing some construction.”
But the NZX-listed company was not at that point right now and it still expected to build 650 to 700 homes in New Zealand and 100 to 150 in Australia this year, he said.
Summerset has become one of the country’s biggest residential builders, and has work on multiple projects in New Zealand and Australia under way.
One of its biggest local builds is a 295-apartment village in Auckland’s Half Moon Bay. It is being built in five stages at a $450 million to $475m cost, and the first apartments are due to be handed over next year.
Scoullar said fuel made up a relatively small proportion of the company’s total cost base, but the flow on impact of high fuel prices to other costs was of concern.
“We are planning for how we manage our business with this price volatility in the market and we’re continuing to stay very focused on costs.”
About half the company’s vehicle fleet was electric, and use of the EVs would be increased as required, but it was also mindful of the impact higher fuel prices could have on staff and residents, he said.
“Commuting costs and reliable access to work for staff are important considerations for us, and we are encouraging residents to use the EVs we have in our villages, and services such as weekly trips in the village van to the supermarket to help them save money on fuel.”
The company was also reducing air travel and making plans for the possibility of a move up the Government’s fuel plan phases by ensuring it had the fuel needed to operate safely, he said.
That included securing diesel for backup generators at care centres, ensuring staff could travel as needed should fuel become scarce, and that medical supplies, food and hospital transfers continued to meet the needs of care residents.
“We’re not making any changes to our day-to-day operations right now, but we will remain adaptable to how things could evolve and we’ll manage as we know more.”
Summerset was not seeing any impact on demand for or sales of occupancy rights agreements for units in its villages, Scoullar added.
“Over the last four weeks our sales contracts have been up approximately 13% when compared to our year-to-date average.
“Our contract cancellations haven’t changed during that time either and our demand remains high – in fact we had our highest March ever for customer enquiry.”
The company reported 365 sales over the three months to the end of March. There were 177 new sales and 188 resales, with new sales up 34% and resales up 19% on the same period last year.
For more in depth reporting about the Iran war’s impacts on New Zealand visit our dedicated section.