The building and construction sector is facing challenging times with consents down 21% in Northland over the past year.
A hefty drop in building consents issued in Northland mixed with stubbornly high building costs and canned Government commercial projects are putting the squeeze on the region’s construction workforce.
The latest Stats NZ figures show that overall, consents for new homes in New Zealand rose 1.3% in the year to August, compared to the year before, including in Auckland where consents were up 5.4%.
However, Northland topped the list of regions where consents were down, with only 727 new homes consented in the year to August 2025 - a 21% decrease.
Waikato was the next region which fared poorly with a 4.4% decrease, followed by Canterbury, down 1.7%.
Far North NZ Certified Builders Association president Josh Alley, from Divine Construction, said “it’s definitely gone pretty quiet”.
While some builders had lots of work on, others had been struggling since around last year, he said.
“Compared to 2022 it’s quite different; the market has definitely fallen through.
“Most of that is the cost of building ... it’s the same as 2008 when everyone pulls in tight and doesn’t want to spend any money.”
Nationally, the construction sector has 10,214 fewer jobs than August 2024, and 18,427 fewer jobs since August 2023, according to Stats NZ.
In Northland, there are currently 243 fewer construction jobs compared with August 2024, and 645 fewer jobs compared with August 2023.
Matt Hatchard, who owns Hatchard Builders in Russell, said there were “definitely fewer jobs out there” over the past 18 months.
Building costs were still high, fewer consents were being issued, and there had been a drop in group housing and larger commercial projects, he said.
Some tradies were heading off to Australia to try their luck, he said.
“This downturn is quite significant.
“It’s right across the board; it’s not just a few people less wanting to build their house, it’s the Government and Kāinga Ora pulling the pin on large scale projects.
“It’s not just limited to carpentry; there are so many associated trades.
“Supply chains right the way through are feeling it.”
On Wednesday, the Reserve Bank cut the official cash rate [OCR] by 50 basis points, bringing it down to 2.5%.
That caused major banks to drop their home loan rates, with one-year rates falling to 4.49%.
Alley said while interest rates were easing, there was “always a delay” in the overall building process.
“If people want to buy land or something to build, they may start to do it now, but it still takes months before they own the land and go through planning process and have them ready for the builder.”
Infometrics principal economist Nick Brunsdon said the building sector had faced a challenging few years compared to 2022 when business was booming post Covid.
“In 2022 we had super low interest rates and super high levels of building activity.
“Nationally we hit 50,000 building consents which was a record.”
While interest rates were slowly coming down, which in theory makes things more attractive, “it’s still not back to where we were in 2022”, Brunsdon said.
“We may not get back to that level with post Covid super low interest rates.
“It’s unlikely we will get building activity back to that level, and that’s challenging for the building sector.
“We are starting to recover now, but naturally people expect to go back to where we were a couple of years ago, but that may never happen.”
Brunsdon said another factor hindering growth was high unemployment, with people either having lost their jobs or afraid they may be next.
“In that environment, not many people will go to the bank and borrow huge amounts of money.”
While significant, the 21% drop in building consents issued in Northland is an improvement.
In May, the Northern Advocate reported that in the year to March they were down 31% on the year earlier – the largest decrease in NZ.
Despite the challenges, Alley said “things are starting to pick up”.
“Some architects are starting to see more work coming through.”
Jenny Ling is a senior journalist at the Northern Advocate. She has a special interest in covering human interest stories, along with finance, roading, and social issues.