House prices will continue to go up in Tauranga as the industry battles numerous issues. Photo / NZME
House prices will continue to go up in Tauranga as the industry battles numerous issues. Photo / NZME
House prices in Tauranga are predicted to climb as the construction industry battles a labour shortage, supply chain costs, a lack of land and the latest lockdown.
And the Chamber of Commerce is warning the housing crisis and the staff shortages are "a perfect storm for businesses''.
Classic Builders Group director Peter Cooney. Photo / NZME
The directorof one of the Bay's biggest building companies, Classic Group, Peter Cooney, said every lockdown created issues.
''We have just to hope we get back to level 3 quickly that will allow construction to get back into it.''
The industry was still grappling with supply chain and labour shortage issues which would ultimately drive up house prices, he said.
''You can't go from building 30,000 houses to 40,000 without there being some major, major issues within the industry. You can't increase it that much and expect to have the resources when the borders are closed.''
House prices would continue to rise in line with increased costs, he said.
Classic Group estimated it would build 300 homes in the Bay of Plenty and 850 nationally, this year.
Venture Developments director Mark Fraser-Jones said labour shortages were causing a major delay in the construction industry.
''Not just in terms of labour on-site but office staff also. Architects/draftsmen, quantity surveyors and project managers are all next to impossible to find. If the Labour Government's plan is to dramatically increase the cost of the housing by severely restricting immigration then they are doing a great job.''
The company expected the number of new builds in 2022 to be the same as this year, but delivery dates were becoming increasingly harder to predict.
''This is incredibly frustrating for both the industry and the consumer.''
Barrett Homes national sales and marketing manager Lianne Simpkin. Photo / Supplied
Barrett Homes national sales and marketing manager Lianne Simpkin agreed the lockdown would cause delays.
''Keeping the customer informed during this time is key and generally, they are well-versed regarding the reasons for any delays and are content to work with us for best outcomes. With any delays, Barrett Home does have to absorb some costs.''
She said title and building consent delays were challenging and cost escalations with material/product shortages and delays were of heightened concern.
''Land acquisition is challenging locally, we have been proactive in securing land in other locations throughout New Zealand. The builders with access to land are in a fortunate position for future development.''
Pent-up buyer demand meant it had extensive waiting lists.
''The thirst for new builds will continue as parents assist their children to secure property with a fear of missing out. We are disappointed we cannot look after as many people as the market demands.''
Priority One chief executive Nigel Tutt said the construction sector employed about 12 per cent of the workforce in the region and was growing.
''Any time in level 4 is detrimental to the industry, alongside others like retail and manufacturing that are not essential services. We are seeing the labour shortage and supply chain issues affect business across all sectors.
''Increasing construction costs are felt across the country, and our land supply shortages certainly don't help in this region. I know a number of local and central government agencies and businesses are working hard to free up more supply here – this is the key to making it more affordable.''
Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / NZME
Tauranga Chamber of Commerce chief executive Matt Cowley said delays to meeting project milestones would mean payments would also be delayed.
''We locked down with little notice, meaning either the builders or the end customers will be charged extra hireage fees, such as scaffolding or scissor lifts. Someone will need to pay.''
The construction sector was not only a major contributor to GDP it was also critical to addressing social issues, ''like our housing crisis''.
A housing crisis, combined with a staff shortage crisis, was a perfect storm for businesses.
''House prices have gone crazy recently, largely due to a lack of supply. House prices impact businesses because rent and mortgages consume a big part of an employee's wages.
''Staff are looking for better pay just to keep up with their increased rent or mortgage payments. Businesses inevitably need to pay more to attract and retain their staff when the region's housing affordability worsens, especially during a labour shortage.''
The Minister of Housing and the Minister of Immigration were approached for comment.
