Sunny for some, but not residential builders

By Lawrence Gullery


The extended summer weather has lifted productivity in the "vibrant" commercial building sector but it's of no use in the residential market, which has continued to struggle in Hawke's Bay.

Certified Builders chief executive Grant Florence said fine weather was boosting "consumer confidence", especially in metropolitan areas and some provinces.

"People have been able to build without wet-weather delays. Rural areas have probably been hit harder though and confidence in those areas to spend is not so great as people are unsure about the impacts of the drought.

"We are forever hopeful about the building market and I think activity in some areas has increased, outside of Christchurch and Auckland. Other areas are still flat."

Hawke's Bay's Gemco Construction has several big commercial projects at the moment including the Hawke's Bay museum and Farmers redevelopment projects in Napier, as well as the $1.5million redevelopment of the Flaxmere Water World building.

Director Darren Diack agreed the lack of rain had lifted productivity to the benefit of clients. "But you have to have the work first of all and we've got plenty to go on with at the moment. The weather has been fantastic for foundation work so there's been no hold-ups. Certainly the commercial sector is vibrant but I understand residential housing is still slow."

Residential builder Target Construction in Napier said there was not a lot of new work on its books at the moment.

A spokesman said clients were taking advantage by demanding lower prices which had resulted in some building companies "falling over".

"When you look at the latest building consent figures you can see there's very little work. Some people are playing builders off one another for the cheapest price but we're not prepared to do that."

The company had instead found work in trade design to keep it ticking over.

Horvath Homes also worked in residential building and agreed work was tight. "We have a good amount of work but not everyone is in the same position and it's very competitive. The market is up and down and a bit more consistency would be great," director Adam Horvath said.

He agreed some people were using the lack of work to drive down prices.

"There are no miracles in the building industry because you can only build for a certain amount and it's scary to think some people are building at a loss and not realising that until the job is finished.

"Profit margins are tight and have been for the past three to four years. People thinking they can get x amount of dollars off is not realistic."

Most of Horvath Homes' work was in Hawke's Bay but the company was also looking "further afield".

- HAWKES BAY TODAY

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