The shine appears to be coming off the home renovation market, with the number of building consents issued for residential building alterations and their average value both in decline, according to Statistics NZ figures.
A building consent is required when work involves structural alterations to a building, such as adding or extending a room, rather than mere redecoration such as painting or upgrading fixtures and fittings.
In the 12 months to May this year, consents were issued for 24,877 residential building alterations, down from 26,011 in the 12 months to May 2024, 27,807 in the 12 months to May 2023 and 31,118 in the 12 months to May 2022.
That's a decline of 6241 (-20.1%) over the last three years and means residential alteration consents are now at their lowest level since 2013.
The record high for alteration consents, in figures which go back to 1991, was 34,243 in 2007.
The average value of the alterations consented peaked at $94,538 in the 12 months to May last year, then dropped back to $87,518 in the 12 months to May this year.
That suggests that not only are fewer alteration projects being undertaken, the average amount being spent on them is also in decline.
The total value of residential alteration work consented has declined from a peak of $2.523 billion in the 12 months to may 2023, to $2.177 billion in the 12 months to may this year, a decline of $346 million (-13.7%) over the last two years.
The slowdown in residential alteration work is adding to the residential construction sector's woes, with the number of new dwellings being consented declining by almost 32% over the last three years.
20 Comments
Is anyone being quoted less than the peak for trades. Seems to be no real movement. Perhaps it does cost $80/hr to have an apprentice on your books...
I'm still running at 2022 hourly rates, although little of our work is charged hourly. No one I know in trades is reducing hourly rates, some are discounting quotes though.
An apprentice costs me more than $80 an hour, because whoever supervises them is less productive than they'd be otherwise.
Fair enough.
At this rate does it mean the apprentice just stands around watching the tradesman or does the apprentice do old style hammer hand work? What do you actually pay your apprentice. It could be less than minimum but certainly not much more than minimum. $80/h seems extraordinarily high. I used an apprentice 3rd or 4th year, just about before he was to become qualified. It was for non-building work ie not requiring an LBP. This was 18 months ago. Paid him $65/h. He was happy as Larry.
Just checked. Over 16 it's minimum for an apprentice. Could be more of course.
I don't really take on a lot of apprentices these days as most of what we do is fairly specialized and involves a fair whack of compliance. I'll usually pay anyone $5-10 an hr more than industry, so for an apprentice something like $30-$35 an hr.
I wouldn't be charging them out much cheaper though, because as I said, an apprentice usually ends up deteriorating the output of the workers overseeing them.
by Pa1nter | 26th Jul 25, 10:46am
I'm a horticulturalist ...
And a construction company owner?
Yeah. I spose "horticulturalist" isn't my profession, but I developed and run a commercial farm.
Can also chew gum and use my phone.
Appreciate the context
Apprentices are usually increasingly productive...first year a lot of hand holding and a cost, by the time they second and third year should be well and truely paying their way....and (relatively) cheap labour
Apprentices are usually increasingly productive
Can be. It's usually apparent after 3-6 months.
With house prices falling very few are buying with the intention of suddenly doing a big renovation, its a more sure way to buy the done products... which leaves the un renovated languishing on the market...
I think this fact, that desirable houses are selling, is hiding the real price movements we will see once price discovery meets the remaining overhang (often needing major modernization).
This discovery is going to reveal that many older houses are basically land value only, due to the current building codes etc, renovation is simply not worth it vs bowl and rebuild.
Making it even worse is that developers are not really in a position to buy and bowl as sales are somewhat unreliable with so much on the market.
This discovery is going to reveal that many older houses are basically land value only, due to the current building codes etc, renovation is simply not worth it vs bowl and rebuild.
If it's for an owner occupier then the codes are less relevant. The government doesn't care if your own house doesn't have adequate insulation and heating etc.
More likely it'll follow true to form that new building will be subdued for another few years and the maths behind a Reno is more appealing - I've already been seeing this for the past 6-9 months in the tender market.
There's no escaping the construction rout. Even the reno sector is now getting plundered.
Investors positions are not improving , most are interest only mortgages , they are underwater and still sinking....
who exactly are going to save the sector?
Boomers are spending up a storm building dream houses for their final years
Strangely, the education sector is back into spending mode
Charities are building socialhousing
There'll probably be another natural disaster at some point
I went through all this in 08, and it's fairly similar. Certain trades and sectors end up kinda slow, and the nature of the work morphs and changes. We haven't exactly been overflowing with workers for the past decade or two so most people will end up steady, instead of most people being manic.
Boomers are working out how to sell them thar 800sqm dirt patch for 950k, to plug that into a Rymans 850K village unit.
SIMPLE NZ SITUATION:
1. Too many sellers and stuff all buyers at INFLATED price expectations.
2. Too much current Debt being subsidised by the banks, BETTING it all on them paying it back, after extending them interest only payments.
The banks are working overtime trying to refloat the sunk NZ housing Ponzi......to no effect. The banks are compromised now, due to their now long extended loan forbearance.
SHORT THE NZ/AU BANKS!!!
Boomers are spending up a storm building dream houses for their final years
Strangely, the education sector is back into spending mode
Charities are building socialhousing
There'll probably be another natural disaster at some point
none of the above seems to match with current construction industry pain?
but please keep posting crap
I went through all this in 08,
You really think that the Ponzi could expand again like 2008 to 2021.
You have the best dried green shoots in town, what exactly is your Horticulture biz?
none of the above seems to match with current construction industry pain?
but please keep posting crap
The current "pain" is slightly less activity in aggregate, it's not the fall of Rome.
You really think that the Ponzi could expand again like 2008 to 2021.
Isn't "the ponzi" house price rises? On that, I couldn't say. But house construction since 08 has been mostly subdued, it's really only been really high since around 2018.
Construction overall should remain fairly healthy over the next decade. New housing is just one component.
You obviously need to approach this subject via abstraction with the same lens you use for pretty much anything.
Ole P man, is obviously hog tied up and trussed like a Christmas turkey onto the NZ Housing Ponzi. He obviously wants out, but at 2021 pricing.
Missed the bus bro.
This sucka is going down.
Housing related work is lucky to make up 10% of my revenue. I generally avoid it like the plague outside of servicing existing clients.
This isn't actually a thread about the housing ponzi but good to see you can talk to such a wide range of subjects.
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