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Leading home builder disappointed in Cabinet announcement

Jennian Homes, one of New Zealand’s leading new home builders, is deeply disappointed that the building and construction portfolio has been given to a Minister outside cabinet.

Director Richard Carver says the announcement is extremely disappointing to the building industry when it is facing both a recession and a major construction downturn, creating some of the biggest challenges in living memory for the industry.

“Over past weeks John Key and others have expressed concern about the seriousness of the crisis confronting New Zealand’s building and construction sector.  Our sector’s $12 billion turnover is falling in value daily as we face this unprecedented downturn. A number of regional housing companies have already failed, fuelling unemployment figures.  We are anticipating further company collapses and the loss of 20 to 30 percent of construction related workforce during this down cycle, which will result in further skills shortages in the years ahead. This boom bust cycle must be broken for the sake of the industry” said Mr Carver.

“Given the importance of the sector to New Zealand’s economic and social development, it is incredibly disappointing to see the building and construction portfolio reduced to a portfolio outside cabinet,” Mr Carver said.  “It sends a signal that this sector has less priority than previously advised.”

“It is some consolation that Maurice Williamson is a very experienced Minister and politician, but he has no experience in our sector.”

Mr Carver said the industry was looking to the new National Government to take major steps to resolve once and for all the legacy of weathertightness, address the cost of compliance and other regulatory requirements on businesses in the sector, and to address the macro issues that perpetuate the boom and bust cycle of the sector such as interest rates and immigration. Other issues that also need to be urgently addressed include Home Warranty Insurance, licensing, building and consent fees, the availability and price of land; and the cost of labour and materials.

“The building and construction sector has seen mixed leadership from Government in the past nine years with six Ministerial changes in the portfolio.  This has contributed to a lack of progress on the real issues that we are seeing today.  We are looking to National to take our sector and these issues seriously.”

Jennian Homes welcomes the appointment of Phil Heatley as Minister for Housing having been spokesperson for the past year, and is looking to see the Minister progress work in housing affordability.

Jennian is also wanting to understand the broader role that the new Minister of Infrastructure will play with the hope that the building sector’s issues will be a major consideration in this macro-portfolio.

Mr Carver said the new Government should urgently meet with the industry to develop solutions to restore the Kiwi dream of owning a home, and to minimise the unsustainable fluctuations in the residential housing market. In the past 12 months the industry has seen the number of residential consents drop from nearly 26,000 to approximately 16,000 (nearly 40%) which creates constant uncertainty for everyone involved in the industry. Mr Carver believes that the industry needs a strong voice inside cabinet.

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