Here’s why there’s light at the end of the tunnel for the building industry

Monday, 4 August 2025

There was annual growth in the number of new homes consented for the first time in two years in June, Stats NZ says.

Christchurch builder Ziggy Conroy reckons it could take another six months before the construction downturn is over, but he is seeing signs the tide is turning.

His company, Zen Builders, has been fortunate to make its way through the tough times successfully. It is new build work which has been particularly hard hit, and they specialise in renovations and extensions, he says.

“There’s still a scarcity of work in the industry, but we have been lucky. And now, we’re getting more clients wanting bigger projects.

“So instead of a minor kitchen job, they might want a significant extension. They are willing to invest more in their property, and they are less wary about building.”

There had been a bit of a shift from clients getting building work that they needed to getting work they wanted, and he was hearing similar from others in the industry, including architects, he said.

More clients are wanting to get bigger jobs and are willing to invest more, Zen Builders’ Ziggy Conroy says.

“It might be interest rates coming down, it might be building material prices stabilising. It would be good to see prices come down a bit, but there is more competition on the materials front, and that helps pricing.”

Conroy, who has been in the industry for 17 years, said while the environment was still challenging, he could see green shoots emerging, and was optimistic the industry was heading out of the downturn.

His take contrasted to the results of ANZ’s latest business confidence survey, which reported “a tanking of residential construction activity expectations to the lowest level in a year”.

But Conroy is not alone in his view, with the likes of the Building Industry Federation saying similar, and now a host of recent data provides some evidence for it.

Stats NZ’s latest consent figures, which were released on Friday, revealed there were 33,979 new homes consents over the year to June, an increase of 1% on the same period last year.

The total remained significantly down from the record high of 51,015 in the year to May 2022.

But Stats NZ economic indicators spokesperson Michelle Feyen said it was the first time in two years they had recorded annual growth in the number of new homes consented.

The long-term trend in new homes consents has stabilised, Westpac’s Satish Ranchhod says.

The lift was largely due to a 6.3% rise in stand-alone house consents, but Auckland consents were also up 3.2% over the year, she said.

“It’s the first time since early 2023 that Auckland’s annual consent numbers have increased. As the country’s largest region, this rise played a key role in the overall increase in home consents for the year.”

Westpac senior economist Satish Ranchhod said the longer-term trend in consents was what was important, and there were continuing signs that construction activity was stabilising.

Over the past year just shy of 34,000 new dwellings were consented, and consent issuance had remained around those levels for a year now, he said.

“It signals that the downturn in the sector is nearing a base. However, a lift in activity is still a way off.”

A backdrop of limited house price growth and labour market related household caution around major spending decisions meant developers and occupiers were hesitant to bring new projects to market, he said.

“We expect that over the coming year, low interest rates will support a strengthening in the housing market, and that will support a lift in new building.

“That recovery is likely to be gradual. We don’t expect a material lift in new building until next year.”

Demand for tradies to do plumbing jobs is particularly high in Wellington, BuildersCrack says.

But new data from tradie job platform Builderscrack suggested that demand for general residential building-related projects was on the rise.

Builderscrack spokesperson Rachel Radford said demand for such work had increased in all of the five most populated regions from January to June, as compared to the previous six months.

There had been a 21.5% increase in demand for building-related projects from Wellington homeowners in the first half of the year, for example.

“Next up is Waikato at 13%, followed closely by Auckland at 12%, Canterbury at 7.5% and Bay of Plenty at 3.5%.”

The most requested type of job was home maintenance and repair, in contrast to the huge demand for discretionary kitchen and bathroom renovations seen at the height of the building boom in 2021, she said.

Next up was building jobs involving decks, home extensions and alterations, and some renovation.

Plumbing work was also in high demand, particularly in Wellington where it was the most requested type of job, and demand for roofing work increased the most over the six month period.

Radford said Builderscrack captured real time trends in its data, and in that data they were seeing green shoots that suggested what could be the start of a recovery.

Cranes are a great barometer of construction activity, NZ Crane Hire’s Deane Manley says.

It also showed how home owner demand was evolving, and there did seem to be more confidence in spending coming through, she said.

“We don’t want to give false hope. We know how hard it has been for tradies, and that it now takes longer for homeowners to decide if a job will be a good investment.

“But our data does hint at the beginning of an uptick. Looking at July, for example, it was unreal. Demand was up 30% in July, compared to the same time last year, and July is traditionally a slower month for tradies.”

They would be watching closely to see if the trend continued, she said.

NZ Crane Hire founder Deane Manley agreed some signs the outlook for the industry was improving were emerging. He was no longer wondering if the light at the tunnel was actually an oncoming train, he said.

His company recently conducted a survey of 105 customers, including some big construction companies, and it showed 25% anticipated their crane needs would increase while 61% expected demand to remain stable.

The mood was still subdued, but the results were a contrast to what they were hearing at the same time last year, and indicated a shift in momentum away from the feeling it was going to get worse, he said.

“While several respondents noted the market was still “tough”, there were hopes of a rebound, especially in commercial builds, infrastructure and large-scale residential work.

“Cranes are a great barometer of construction and infrastructure activity,” he said.

“So after a lean few years, it’s great to hear customers talking more positively about opportunities for growth and increased productivity in the sector, as that’s key to driving new projects and finishing stalled projects.”

Caution was still running through the industry, Manley added.

“Even among those predicting growth, the uncertainty is understandable given industry volatility and economic pressures continue to persist because of interest rates and labour shortages which creates a wait-and-see attitude.”