The past few years have been marked by significant challenges, testing the resilience of builders, developers and suppliers alike. As the dust begins to settle, we see signs of recovery and fresh opportunities on the horizon and it’s time to focus on building confidence – in the industry and for clients.
Recent data from Stats NZ provides an encouraging snapshot of the sector’s trajectory. In November 2024, 3,100 new homes were consented – a 4.8% increase compared to the same period in 2023. Multi-unit homes saw a significant 14% percent rise, while stand-alone houses dipped slightly by 4.1%. These figures paint a picture of cautious optimism, with developers and clients starting to revisit their building plans. This shift, while modest, is a step in the right direction.
Why confidence has returned to the market
A critical driver behind this is the reduction in the official cash rate (OCR) over recent months. Lower interest rates have begun to ripple through the economy, improving access to finance for both developers and prospective homeowners. Although enquiries have increased across the sector, the conversion of those enquiries into signed contracts remains slower than we might want. This highlights a lingering hesitancy among clients, but further OCR cuts may provide the certainty they need to move forward.
Indeed, the latest NZIER Quarterly Survey of Business Opinion also showed the building sector was the most optimistic, with a net 29% of building sector firms positive about the economic outlook for the coming months. This was a sharp turnaround from the 9% of firms feeling pessimistic in the September quarter and over 50% in the first half of 2024.
Building stronger foundations
Beyond the numbers, 2025 presents an opportunity for the sector to strengthen its foundations. One initiative I am excited about is Master Builders’ new voluntary financial rating programme, launching in partnership with CreditWorks. It will allow builders to demonstrate their financial health and robust business practices to clients, suppliers and lenders – going beyond traditional credit checks to offer an analysis of financial metrics highlighting the professionalism and stability of businesses.
This initiative is not just about meeting today’s challenges – it’s about preparing for the future. As the market recovers, businesses combining craftsmanship with sound financial governance will best succeed. Master Builders is committed to supporting our members in this and enhancing the reputation of the sector.
Opportunities for growth
The opportunities for growth in 2025 go beyond residential builds. The deficit in affordable housing and infrastructure is a challenge that has spanned decades and successive governments. As economic conditions improve, we must be ready.
The initiatives aimed at reducing red tape and driving productivity are a welcome step. However, their success will depend on the details of their implementation. Master Builders looks forward to working closely with government to ensure these policies translate into tangible benefits for the sector. One area of focus is efficiency in the consenting process. Streamlined processes for low-risk residential builds, backed by guarantees, could free up valuable resources for more-complex projects. Technology has a role to play in enabling initiatives like this. BRANZ’s Artisan is the perfect example. Many of our members use it as a quality assurance tool and as a consenting tool because having a record of work completed streamlines the consenting process. We believe this will play a role in any self-certification solution. Initiatives like these will enhance productivity and standards.
Looking ahead
As we set the stage for 2025, my message is that confidence is the cornerstone of recovery. Together, we have the tools and resilience to build not just homes but stronger businesses and communities. Let’s embrace the opportunities, sharpen our skills and demonstrate the professionalism that defines our industry.
Our sector has weathered its share of storms, but brighter days lie ahead. With them comes the promise of growth, innovation and success. Let’s make the most of it.