A new NZCB survey shows 78 per cent of Bay members have six months of work booked ahead. Photo / Getty Images
The Bay's construction industry has experienced strong recovery post-Covid-19 lockdown, with one company drawing up a "record number" of house plans for new builds, leaving the team struggling to keep up with demand.
Meanwhile, Tauranga and Rotorua members of the New Zealand Certified Builders Association say they have six months - and in some cases a year - of work booked in advance.
Industry experts say Kiwis seem to be taking advantage of rock-bottom interest rates but they fear a shortage of land and tougher loan approvals may mean challenging times ahead.
New Zealand Certified Builders chief executive Grant Florence said the construction industry in the Bay of Plenty, including Tauranga and Rotorua, was "extremely busy".
Florence said a recent survey showed 73 per cent of its Bay members recorded having six months' or more work in front of them and in some cases were booked 12 months ahead.
"Some reported work had actually increased further since lockdown and about 78 per cent are quoting new work. So the phones are still ringing."
The work was split between both major alterations and new builds, he said.
The rush, he said, was likely due to people no longer taking holidays and were redirecting their spending and low-interest rates were also having an impact.
"It is a vote of confidence for the wider Bay of Plenty and its future."
Classic Group director Peter Cooney said enquiries bounced back steadily post lockdown nationally and his team had experienced strong sale numbers in most regions since.
"Last month we were just shy of having a record sales month, 69 sales, which is pretty extraordinary considering the current circumstances.
"We have also drawn a record number of scheme plans (house plans) with our design team struggling to keep up with the consistently high volume of work."
Cooney said with interest rates at record-low levels Kiwis were taking advantage of the opportunity to become homeowners and property investors.
"I predict sales will remain strong for now while the financial markets remain stable, but there will be challenging times ahead, it's just a matter of when."
The main issue that faces Tauranga, he said, was a land shortage that will drive house prices up to a level that will exclude a lot of people having the opportunity to buy here.
"This will become a fundamental issue for Tauranga and something we need to address now."
Regional manager of Classic Builders Tauranga, Nathan Watkins, said his team had experienced a "frenzy of sales activity" in the Bay since May.
"We have released four stages of house and land packages in our Tauranga and Ōmōkoroa subdivisions since the beginning of May and every stage has sold out within a matter of days.
"Just this week we released eight house and land packages at Kaimai Views in Ōmōkoroa to a list of interested people and all eight had holding deposits on them within 20 minutes."
Scott Adams, managing director of Carrus, said the market had been extremely active.
"If we had any land at The Lakes, contracts would be flying out the door."
Adams said since May 1 post lockdown he has signed 50 sales and purchase agreements for sections in Nga Roto Estate in Taupō and 100 in the company's Wellington developments.
"Those with funding approval want to take advantage of that now before bank offers expire.
"There is a concern from the market that loan approvals will get a lot tougher next year."
Record low-interest rates was also a driver in the market, he said.
Plus, he said, families motivated to build new and bigger houses after being confined to a small shared working space with the whole family during the lockdown.
Bluehaven Group chief executive Nathan York said his team had seen a continuation of last year's strong residential inquiry and sales in Pāpāmoa's Golden Sands area.
The company had about 120 houses under construction in Golden Sands and the Excelsa Centre was scheduled to open in November.
"Golden Sands, Pāpāmoa has certainly remained an area of exceptionally high demand, especially given the new medium-density housing options available and of course our key locational advantage, being a coastal area.
"With the right house pricing, say around $600,000 for a brand new three-bedroom home, many people are seeing the financial logic of buying versus renting at say from $500 per week in Tauranga.
"Providing they can source the necessary deposit and have the ability to service a mortgage, it makes sense."
However, York said immediate concerns for the construction sector were mainly centred on the future headwinds associated with Covid-19 and the downstream economic and employment impacts.
"There is also a strong need for further infrastructure investment to ensure we continue to sustain and ultimately grow as a city."
Calley Homes Limited director Johnny Calley said the level of inquiry for new builds post lockdown had been "very strong".
"In fact, I would say stronger than pre lockdown."
Calley said people were choosing to build in areas across the city.
"The Mount is still strong and we have also had a project come in from Waihi Beach."
People with secure jobs and businesses were "just carrying on with life" post lockdown, he said.
"Part of that is stepping up the property chain or upgrading existing dwellings.
"Interest in renovation projects is at very high levels. Low-interest rates and strong net migration into New Zealand of ex-pat Kiwis is providing confidence in the property market."
However, Calley was concerned the residential construction industry economic confidence will subside through repeated lockdowns.
"Presently the major political parties focus has been on roading projects that are 'shovel ready' but this needs to extend further into land development projects and other residential stimulus options."
Todd Grey Builders Ltd director, Todd Grey, said things had returned to pre-Covid levels.
"Definitely post lockdown we found a lot of builders still had contracts that were either just starting or at some point through construction that after lockdown were able to get straight back into.
"It definitely seems to be the same as before Covid hit."
Grey, who is also president of Master Builders Association Tauranga, said he was yet to see whether the thousands of ex-pats arriving back into New Zealand had created a demand.
Dylan Oswald of Oswald Construction Limited said he had not noticed any decrease in jobs or enquiries since lockdown.
"We had a couple of big jobs we started before Covid hit that we have been able to carry on with and we're still pricing a lot of work," he said.
"We have got a couple of new builds on the go.
Oswald, who is also vice president of the Rotorua branch of Master Builders, said everyone at the meetings had experienced a busy bounceback from lockdown.
Urbo Homes manager and company director Martin Dobbe said there had been "a rush" after lockdown to get back into current workloads and ensure future inquiry/jobs were still lined up.
"Inquiry has still been reasonably strong with people still progressing with plans to build."
Dobbe, who is president of the Rotorua branch of Master Builders said some people were moving forward with initial plans but were watching to see what unfolds before fully committing to the next stage.
"If this inquiry progresses builders will still be busy well into next year," he said.
"Nobody really can call what it's going to be like in 12 months' time. So far it's evolving strongly for builders but confidence is the key to the economy and people's willingness to commit to building."
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