Building in Northland toughest in decades, industry hopes for turnaround

Northland's building industry has been doing it tough, with new building consents dropping 31% in a year. Photo / NZME

Northland builders are hoping dropping interest rates and a lift in the economy will encourage homeowners to build after riding out the toughest period in decades.

Figures from Stats NZ show the number of new building consents issued in Northland in the year to the end of March this year is down 31% on the year earlier – the largest decrease in New Zealand. The average national decline is 3.3%.

In March, only eight building consents were issued in Kaipara, 13 in the Far North and 32 in Whangārei.

Matt Hatchard, president of the Bay of Islands/Far North NZ Certified Builders Association, said things have been tough and the flow of money is “very tight”.

His Russell-based building business, Hatchard Builders, diversified last year by buying a shed franchise, KiwiSpan. This was a good way to help weather the challenges, he said.

Hatchard hoped things would start turning around in spring and the building industry would be on the up again by next year.

With the cost of building materials constantly rising, delays or pauses in projects simply made the costs go up, he warned.

A study by QV CostBuilder found building costs rose an average of 44% in the four years to the end of 2024.

Hatchard also urged homeowners to stick with a reputable builder and get a realistic price. He saw two Northland projects where the builder had gone under halfway through because the project had not been priced realistically.

“If something is too good to be true, it almost always is.”

Matt Hatchard from NZ Certified Builders Association warned homeowners to stick with reputable builders and look for realistic prices.

A1 Homes Northland manager Steve Hart said sales in 2024 and 2025 have been at the lowest point in the company’s 22-year history of building in Northland.

But Hart said inquiries are starting to pick up, despite April and May traditionally being quieter months, with interest mainly coming from people looking to build a second dwelling.

Central Government changes that will allow granny flats up to 70sq m without consents have resulted in more people looking to buy a minor dwelling, he said.

The legislation is expected to change by the end of the year.

A1 Homes Northland manager Steve Hart said sales have been their lowest in the company's 22-year history but inquiries are starting to pick up, particularly for granny flats.

Hart hoped Northland’s economy would be boosted by progress on a four-lane highway to Whangārei and possible fast-track projects like the Northport expansion, attracting people north.

Homeworld Design and Build director Barry Trass agreed things had been tight, not just for construction but also for other businesses like retail.

Builders have been hit by “a double-whammy” of people not having money to spend and building materials going up, he said.

But Trass was confident the tide is turning and homeowners are showing confidence to build, thanks to lower interest rates and an increase in the value of existing properties.

Northland Development Corporation director Barry Trass. Photo / Michael Cunningham

“I think we’re heading in the right direction.”

But commercial builder Darrell Trigg expected it would be a further 18 months before the commercial building sector sees an uplift in Northland.

Commercial property owners are not able to increase their leases to cover the 44% increase in building costs, making such projects “all a bit too hard” at the moment, he said.

While work on the $35 million child health unit at Whangārei Hospital has started, the coalition Government has pulled out of several school builds due to the rising costs, meaning less work to go around, he said.

Darrell Trigg says commercial construction will likely lag behind the residential building industry and probably won't see a turnaround for 18 months.

As chairman of Master Build Services, Trigg is concerned the building industry will lose qualified builders in the downturn and won’t have enough workers when it picks up again.

“The mortal fear is that they will find something else to do in Australia or become a cop, and then we’ll have to start again.”

Trigg Construction is getting several queries each week from builders or project managers, mainly from Auckland, looking for work, he said.

Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.