Mr Taylor said the commercial building sector was busy, which put pressure on sub-contractors.
"There is usually a labour pool that sits between residential and commercial and a lot of that floating pool has been sucked up by the big companies.
He said demand for sections was high across all price levels in Napier, Hastings and Havelock North. The law of supply and demand was holding true, with a jump in building costs due to both labour and material price increases.
He said the capacity of the Hawke's Bay building sector was slowly recovering following an exodus of people to quake-stricken Christchurch during a slump in the local industry.
The introduction of a licensed building practitioner regime coincided with some older builders renewing their licensing "which put a little bit of pressure on the labour market". There was also a reluctance to take on new apprentices because land availability in Hawke's Bay was low.
That situation had changed, with councils "openly communicating" and freeing up land, he said.
The increase in supply is not before time - house prices are jumping more than 20 per cent annually, rents are up and motels are being used for emergency social housing.
The Heretaunga Plains Urban Development Strategy has identified land for growth and councils have said they expect thousands of sections to hit the market in the coming years.
A 65-house lifestyle village in Taradale for people 50-years plus was recently given resource consent and the developers plan a similar gated development in Hastings.
Mr Taylor said his company was experiencing a lot of inquiry from people in the main centres of the North Island moving to Hawke's Bay.
