Opportunities for building contractors have decreased since mid-2008, largely due to a slump in the number of new houses and apartments being built in New Zealand.

Residential building slumps

Nationally, residential building figures have dropped markedly. Numbers fell by 28% in 2008, compared with the previous year – the lowest annual total since 1993.

While residential building has fallen overall, some regions have done better than others, and opportunities for building contractors have reflected this. For example, residential building has dropped significantly in the major centres, especially Auckland, Hamilton and Christchurch. By contrast, the number of residential building consents issued in Nelson, West Coast, Tasman and Otago increased modestly in 2008.

Housing shortage may see renewed demand for building contractors

Industry sources suggest the current lull in new house building could result in a housing shortage as early as mid-2009. This could see a surge in house building in 2010-2011, and renewed demand for building contractors.

Smaller residential jobs providing some continued work for building contractors

While the number of new houses being built has fallen, industry sources note homeowners are focusing more on improving the appearance of their homes before selling or renting them out. This has meant a marked increase in small residential jobs and minor renovations for building contractors.

Housing New Zealand has also started work on renovating 18,000 state houses, which it aims to have completed by July 2010.

Commercial construction may begin to slow

Commercial (or non-residential) construction, where many building contractors are employed, remained strong in 2008. The value of non-residential construction increased by 7.7% in 2008. Most of the increases were in large projects such as schools and office buildings. Smaller projects such as shops, taverns and restaurants – projects usually dominated by smaller building companies – declined.

How well the commercial building sector performs in 2009 will largely depend on how the wider economy performs. Some industry commentators are predicting commercial construction will slow in 2009.

Building contractors are self-employed. They either work directly for a client or as subcontractors to larger building firms.

Building contractors work throughout New Zealand. However, most are employed in the main centres of Auckland, Wellington and Christchurch, where demand is greatest because of population.

On 1 November 2008, the Department of Building and Housing introduced the first stage of the Licensed Building Practitioner Scheme for builders. The scheme will mean that from November 2010, certain work will need to be undertaken or supervised by a licensed builder. To get a licence, building contractors will have to prove their experience and/or have appropriate qualifications.