Of the country’s NZ’s top 15 residential builders, each had 1,000 home builds on their books at March 31. Photo / Jason Oxenham
Build cost inflation, materials and labour shortages have taken a bite out of the construction sector, yet New Zealand’s top home builders still boast chocka workloads and a forward build pipeline that’s out to almost
a year.
Data from construction research firm Pacifecon showed that of NZ’s top 15 residential builders, each had 1,000 home builds on their books at March 31.
That was led by corporate builder Fletcher Living, which reported 3,591 dwellings valued at $1.7 billion – an average project value of $7.8 million across 218 projects.
Retirement village developer Summerset Group was second at 3,361 units, valued at $1.36b across 49 projects. That’s $27.8m per consented job.
The country’s largest franchise builder, GJ Gardner Homes, was at 3,326 homes across 1,206 builds, the highest number of disclosed projects.
Mike Greer Homes came in at 2,640 builds while franchise builders Signature Homes reported 1,902 homes, Jennian Homes was at 1,822 and Stonewood recorded 1,145 units either in progress or on the books.
The research ranked the country’s top 200 builders on a ratio of 90 per cent completed by March 2022 versus 10 per cent of projects in the planning stage.
But Pacifecon suggested the outstanding work probably ranked at closer to 45.5 per cent of work by value, based on the increase in multi-unit developments, retirement villages and larger developments.
That is particularly true of the Auckland market, where terrace housing, retirement villages and apartments hit 83 per cent of all consents during July.
Costs up
With build value across the top 200 residential builders listed as $29.8b, it inferred the top 200 builders still had projected work valued at $13.6b.
Meanwhile, Stats NZ data showed the value of residential build activity at a seasonally adjusted $2.08b for the June quarter, up 3.2 per cent on the prior quarter’s $2.02b.
Stats NZ construction and property statistics manager Michael Heslop said most of the increase could be attributed to rising costs, which rose by 4.2 per cent for the quarter – and 17 per cent over the past 12 months.
The latest construction pipeline report prepared by Pacifecon and the Building Research Association (Branz) indicated that annual construction numbers would tail off in the longer term, at about $9.2b over the next five years.
Credit crunch
The report said that would be the result of escalating inflation, supply chain issues and constricted bank lending to developers.
The Credit Contracts and Consumer Finance Act had also put a major handbrake on buyer lending, which is cited by the industry as the root cause of a year-on-year drop of 36 per cent in mortgage lending to first home buyers, which fell to $1b for July.
Mortgage lending for the month to all borrowers was down almost $1.9b to $5.4b for the month, year-on-year.
