Bay of Plenty builders losing work to outsiders amid construction crisis

Tension is rising among Bay of Plenty traders with claims that job “poaching” by outsiders is widespread amid a national construction slowdown.

A builder who travels for work says he has no choice
after jobs dried up in their city, but another says the trend is a “kick in the gut” for local businesses.

Tradies from Pāpāmoa, Mount Maunganui and Tauranga are reported to be traveling to Rotorua and Whakatāne in search of work as the once-booming western Bay of Plenty construction sector faces a “significant” reduction in new construction permits, in line with a general slowdown in construction in New Zealand. .

Rotorua, however, has bucked the trend, with record housing permits linked to the city’s major Kāinga Ora building programme.

Rotorua Lakes Council went from handling fewer than 400 consents a year in 2020 for housing to a record of around 800 last year. He said the main risk was whether the construction sector had enough capacity, with around 400 builds in the pipeline until mid-2025 and another 100 at different stages of planning.

Rotorua developer Ray Cook said the increase in out-of-town traders looking for a piece of the action was more than notable.

“We’ve experienced a high volume of traders from Tauranga, Mount Maunganui and Pāpāmoa looking for work in Rotorua… jumping on the ute and trying to get some of the work,” he said.

“I have never seen such a high number…”

Rotorua developer Tony Bradley said he was aware of people traveling to the thermal town for construction work.

While the Kāinga Ora projects kept local businesses busy, there was plenty of work to do, he said.

“If they (Kāinga Ora) weren’t doing what they’re doing, we’d be like Tauranga, with low building permits,” he said.

A report submitted to Tauranga City Council in March said consents for new homes in January were “significantly below” forecast, with just 29 units permitted and 20 receiving code compliance certificates, compared to an expected average of 93 per month. Consents in the previous 12 months were 58 percent of what was expected.

There is no other option: traveling builder

NZME spoke to two Bay of Plenty builders who asked not to be named for fear it would affect their job prospects.

A builder from Pāpāmoa said he regularly went to Rotorua to look for work before finding work outside the region.

He said he often worked on housing projects, but jobs had dried up locally. He believed that he was the first to lose his job because he was a subcontractor.

“I’ve tried everything, but there’s nothing here for me, so of course I’d go to Rotorua.”

He said he was one of “many” traders looking for work outside Tauranga.

Local businesses are “hurting”

In Whakatāne, a veteran builder said the sector was “plagued” with people from out of town coming in and “poaching” work.

The builder said it was a “kick in the gut” to lose the job to non-locals.

“I know a lot of guys who are hurting because of these guys going down,” he said.

“I see them coming into town in their big trucks. It’s pretty normal to see all this work being done by these guys.”

“The little (work) we have is being devoured by people from outside the city, not the local people who live here and pay their taxes and fees. “Everything is leaving the city.”

Local tradesmen were now doing smaller jobs, such as renovations or fencing, that they wouldn’t have bothered with six months ago to try to stay afloat, he said.

‘Boom time’ to ‘bust time’

Todd Gray, of Tauranga-based Todd Gray Builders, said his company had a “pretty good reputation”, which helped avoid drastic changes to its core group of clients and sub-trades. He stuck to local jobs, mainly in the Mount Maunganui area and did not travel outside the city.

However, more and more people were approaching him for work since “the slowdown happened,” he said.

“There were people who came to me looking for full-on jobs, but recently I’ve had more people come to me wanting to work for pay, so there are definitely a lot more builders floating around out there,” Gray said.

He said he believed some builders were doing well because they diversified into smaller jobs early on.

The situation was a big change from the “boom era” five years ago, when there were long wait times for projects and builders struggled for staff, he said.

“Definitely, one of those factors is probably interest rates. They have escalated and I think it has surprised a lot of people.”

Gray said the poaching situation was difficult, but “you have to do what you have to do.”

In February, NZME reported that in the past two years, the average one-year mortgage interest rate had risen from 3.7 per cent to 7.3 per cent, which on a $500,000 loan was equivalent to an extra $370 a week.

Kāinga Ora regional director for the Bay of Plenty, Darren Toy, said the housing agency had an extensive building program across the region, including 449 homes in progress in Rotorua and 380 in other cities (167 in Tauranga) as of today. last month.

He said his construction partners hired on projects to build new homes on their existing properties were responsible for hiring subcontractors.

“We have a regional approach to the selection of our construction partners and strive to partner with local companies wherever possible.”

It also worked with private developers, who managed the projects.

Kiri Gillespie is deputy news editor and senior journalist at the Bay of Plenty Times and Rotorua Daily Post, specializing in local politics and urban issues. She was a finalist for the Voyager Media Awards Regional Journalist of the Year award in 2021.