Building consent figures have continued to plummet, with February’s figure the lowest since Statistics New Zealand began tracking the numbers 17 years ago.
The trend has fallen more than 50% since June 2007, and the ongoing month-to-month drop in consents remains a concern for the construction industry, despite measures being introduced by the Government to help the ailing sector.
On the positive side, mortgage interest rates are at their lowest in years, and the upcoming tax cuts will put a little more money into the pockets of New Zealanders.
While this offers some respite, banks’ lending criteria remain tight, and the size of the deposit needed on a mortgage puts credit out of reach for many.
Combined with uncertainty over job security and the lack of an obvious end to the recession, consumer confidence remains low. And while people are reluctant to commit to spending, building consents will fall further.
Big positive impact
At the same time, the Government is still working through changes to the Resource Management Act to remove red tape and make the building process easier and cheaper, and we appreciate the big positive impact that this will have on the sector.
Consent figures may be low, but we need to make sure New Zealand is ready to hit the ground running when housing demand starts to increase again.
Jennian has been operating in the industry for more than three decades, and we know from experience that a housing slump is always followed by another boom in property demand and, consequently, a demand for skilled workers.
The Government needs to follow through urgently to kick-start its proposed infrastructure projects to enable us to retain skilled builders and tradesmen in New Zealand.
If these people retrain in other professions or move abroad to seek work, New Zealand is going to find itself suffering a major skills shortage in the construction sector when the recession ends.