The Building Industry Is Dying – And Not for the Reasons You Might Think
A long-term customer of our architectural hardware business Beyond Hardware has just decided to stop buying and renovating old houses in Auckland, New Zealand. She’s been doing this property recycling in Auckland for more than 15 years – employing many tradespeople, upgrading old unhealthy homes, and putting better-quality properties back on the market.
She’s not closing her business because of rising material costs or price gouging, as you might expect. The real reason is far simpler: dealing with Auckland Council has become too hard and too expensive.
This customer renovates a minimum of ten houses a year. That’s ten consents Auckland Council won’t be processing – and ten sets of fees and contributions they’ll no longer collect. It’s a clear sign of a much bigger issue that’s been quietly choking our building industry for years and now seems to be reaching a tipping point.
As a business owner myself, I’ve always understood that in the private sector, you survive by being competitive, offering value that customers want and are willing to pay for. You innovate, improve efficiency, and try and deliver better results. You constantly find ways to do more for less while staying profitable and growing. And importantly, you invest in your staff, lifting their skills and turning them into real assets, and hopefully not liabilities.
But the public sector, especially many of New Zealand’s councils, seem to work in reverse. Year after year, processes get slower, costs and contributions climb higher, and the service becomes less reliable. It’s getting harder to speak with a real person to resolve issues, even when those issues are caused by the council itself – and believe me, there are plenty.
Despite knowing the challenges our industry faces, from housing affordability to supply shortages, the system keeps getting more bureaucratic. And somehow, there’s still this belief that more red tape equals better outcomes. Anyone who actually builds homes for a living knows that couldn’t be further from the truth. It seems like we need ten chefs to make an omelette now.
The result? Developers and builders who still dare to keep going are forced to scale back – smaller sections, smaller homes, cheaper materials. The outcome is predictable: soulless, uniform housing estates that no one’s proud to build, let alone live in.
If you were Auckland’s mayor, you’d think the goal would be to make the council more efficient, affordable, and automated — to help solve the housing affordability crisis, not make it worse.
Meanwhile, council consent fees and development contributions continue to skyrocket. Rates rise even during recessions, making it harder for many people to stay in their own homes. Unemployment is on the rise too. Commonsense and manners are now a luxury.
Private businesses are expected to “do more with less,” while the system that governs us keeps doing less with more. It’s unsustainable, and it’s driving good operators out of the country.
We see the evidence every week: tradespeople and business owners queuing at the airport, heading for Australia. Industry liquidations are now daily occurrences. Last Friday alone, I received seven notifications of local companies in the building sector going under. It’s simply bewildering.
So, farewell to our good customer — and good luck in Australia. I can’t blame you for leaving.
But for those of us still here, it’s time to have a serious conversation about how our councils operate. If Auckland Council became a private business tasked with the same outcomes, it would soon join the unwanted liquidations statistic.
Maybe it’s time for a rethink, and possibly a new mayor, and a completely new model for how local government supports (not strangles) the industries that build our communities.
Halloween might be over, but if you look around at what we’re building now — it’s still truly horrifying.
Related
Affordable Housing Is Achievable, But…
