Of those being let go, he said: “It’s about 4 per cent. Those people were based across a number of sectors and branches, all sorts of divisions. “It’s like any business: we’ve laid off a few staff due to the economic downturn in the housing market which has been quite brutal - more than people care to imagine.”
Rising interest rates had dampened new housing demand and Classic was looking at avenues to diversify including more commercial jobs and retirement village work.
“It’s hard but we’ve just got to look for more contract work and spec building. We’ve been at it for 27 years now and we have a reasonable idea of what we’re doing,” Cooney said.
Shaun Burney, Classic’s chief operating officer, said head office was in Tauranga “so there’s a mixture between front-line staff and back-of-house head office staff in this city who have been impacted”.
The layoff employment processes had not all been completed, and different people got different terms, depending on their contracts.
“Some already have other roles elsewhere - more than half,” Burney said.
“Other group house builders have laid off significantly more staff than we have. Many have finished those processes,” he said.
Cooney blamed wildly fluctuating interest rates for fuelling the boom and then depressing it, citing Reserve Bank moves.
“They created a frenzy with low interest rates,” he said. Now, big mortgage interest rate rises had significantly hit demand for new homes and Classic as well as others had felt the effects.
“This rollercoaster doesn’t make it easy for our industry. A lot of people will leave, then you’ve got to them back again. We’re either hiring or firing,” Cooney said of the rapidly changing nature of his sector.
Rapidly rising immigration numbers now needed to be factored in, Cooney said.
Data business BCI, which sells information on the number and values of new home starts, found that in the year to February, Classic had built 539 new homes, putting it in the top 10 nationally.
G.J. Gardner remains New Zealand’s busiest house builder with 1241 new homes in the year to February, followed by Williams Corporation with 666, Mike Greer Homes with 628, Signature Homes with 604, Fletcher Residential with 556, Golden Homes with 554 and then Classic Builders in seventh place, BCI said.
“Founded in the Bay of Plenty, Classic Builders is now one of the largest residential building companies in the country. From Queenstown and Canterbury up to Wellington, Waikato, Auckland and Northland, we continue to expand our reach while initiating change toward a better future for housing in New Zealand,” the company says on its website.
G.J. Gardner has built fewer homes in the latest year but a director says many problems which delayed construction previously were now resolved and she is encouraging people to have confidence in the sector.
Ellie Porteous, joint managing director of the nationally franchised business with husband Grant Porteous, said numbers were down around 30 per cent annually.
But the shareholder in Deacon Homes, which is the builder’s master franchisor, wants to encourage people considering building to view the sector positively and take heart that their hopes for a new home could be fulfilled.
In 2021, G.J. Gardner started construction of its 20,000th home since it began here nearly a quarter of a century ago. The business was established here in 1997 but Grant Porteous said it never intended to be as dominant as it has become.
Stats NZ said this month that 9719 new homes were consented in the three months to the end of March, compared with 12,333 at the same time last year. And summer’s bad weather might take a further toll.
Consents from councils around New Zealand for new residential buildings plunged 21 per cent in this latest quarter compared to the same time a year ago.
