A New Year, A New Outlook For The Building Sector
As we step into 2025, there is a growing sense of optimism in the air for New Zealand’s building and construction sector. After navigating a challenging few years, the industry is beginning to see signs of recovery. While the journey ahead won’t be without its hurdles, I believe we are better positioned than ever to seize the opportunities on the horizon.
The November 2024 consenting data, recently released by Stats New Zealand, reinforces an encouraging narrative. A total of 3,100 new homes were consented in November, a 4.8 percent increase compared to the same period in 2023.
Multi-unit homes saw a notable rise of 14 percent, while stand-alone houses dipped slightly by 4.1 percent. This data shows confidence is returning to the market. Clients and developers are gradually revisiting building plans, and this renewed interest is the first step toward increased productivity. This trend is good for our sector, and for New Zealand, as we continue to need more affordable homes.
Positive Economic Trends Are Boosting Confidence
One of the key drivers for this renewed confidence is the series of reductions in the Official Cash Rate over recent months. These reductions have finally begun to flow through to lower interest rates, making finance more accessible for the sector, and those looking to build or renovate.
Many of our members have seen an increase in enquiries over the past few months, but conversion rates to sales remain slower than desired. Whilst this can be frustrating, it does signal the fact we’re moving in the right direction. With another OCR cut predicted for February, it might be the added certainty some clients need before committing to projects.
Strengthening Businesses for Future Success
As we start navigating 2025, it’s essential that we focus not just on building homes but also on building stronger businesses. Master Builders is committed to supporting our members in this effort. One of the most exciting initiatives launching this year is our voluntary financial rating programme, developed in partnership with CreditWorks. This programme allows members to demonstrate their robust financial health to clients, suppliers, and lenders, providing a competitive edge in a recovering market.
Our financial rating initiative goes beyond traditional credit history checks, offering a comprehensive analysis of company health, to help you stand out as a leader in both craftsmanship and business acumen. We’ll have more to say on this in coming months, so keep your eyes peeled.
Opportunities Ahead
New Zealand continues to face a significant deficit in affordable housing and infrastructure—a gap that has widened over decades. As economic conditions improve, we need to be ready so that we can take every advantage to build the homes and buildings New Zealand needs.
Government initiatives aimed at removing red tape and driving efficiencies for the building and construction sector certainly look promising, but as always, the devil will be in the policy detail. The team at Master Builders looks forward to once again working closely with Minister Penk and his colleagues, as some of 2024’s announcements come to fruition and are implemented.
A Call to Action for the Year Ahead
As we start the new year, I encourage all members to take a moment to reflect on their goals for 2025. What can you do to position your business for success in this evolving market? Whether it’s enhancing your financial practices, improving your customer relationships, or adopting innovative building techniques, there are countless ways to make a positive impact.
Confidence is the foundation of our recovery, and together, we have the tools to rebuild and grow. Let us enter this new chapter with a focus on collaboration, skill development, and a commitment to meeting the needs of our communities.
Our sector has been through winter, but summer is here. Let’s be ready to embrace the opportunities it brings.
Ngā mihi nui,
Ankit Sharma
CEO, Master Builders