Construction market remains tough

The building industry is showing signs of resilience despite continuing cost pressures, weaker demand and delays in getting projects consented.

Master Builders’ 2026 State of the Sector survey found that 68 per cent of its members have a strong or steady pipeline of work, slightly up from 64 per cent last year.

At the same time, the proportion reporting a critically diminished pipeline has almost halved, falling from 11 per cent to six per cent.

Master Builders chief executive Ankit Sharma says the results show an industry adapting to difficult conditions rather than waiting for the market to recover.

“Conditions are still difficult, but our members are holding their ground,” Sharma said.

“Many Master Builders have been through economic cycles like this before. They understand how to manage risk, respond early and keep their businesses focused through a challenging period.”

Construction costs remain the biggest concern, identified by 93 per cent of builders surveyed, while 87 per cent cited weaker consumer demand.

Sharma said the figures highlighted the difference between having work in the pipeline and being able to turn that work into viable projects.

“Customers still need certainty around finance, cost and timing before they can commit,” he said.

For homeowners, however, the experience of those who have recently built remains strongly positive.

More than 600 people who had recently built a new home or completed a major residential project with a Master Builder were surveyed.

Nine out of 10 (91 per cent) said they would recommend building to others, up from 88 per cent last year.

The survey also found that 75 per cent experienced no significant delays, while 57 per cent completed their projects within or under budget.

Sharma said the results should provide reassurance for New Zealanders considering building a home.

“There never is the ‘perfect’ time to build,” he said.

“But these results show that homeowners are having good experiences and that capable builders are ready to work with customers to turn their plans into reality.”

Communication was identified as another important factor in keeping projects on track.

Builders were the most commonly used source of information during the building process, with 63 per cent of homeowners turning to their builder for guidance.

Sharma said builders had an important role beyond simply constructing the house.

“For most customers, they are the person helping them understand the process, what is happening next and what decisions need to be made,” he said.

That communication becomes particularly important when costs, timing or the scope of a project changes.

The survey also highlighted consenting as a significant source of uncertainty.

Sixty-eight per cent of builders said their projects had been affected by consenting delays, while consenting was identified as the main cause among homeowners who experienced significant delays.

Master Builders is calling for a clearer and more proportionate consenting system.

“We support high standards, but achieving those standards should not require unnecessary cost, delay or inconsistency,” Sharma said.

For people in Rodney considering a new build, the findings point to a market that remains challenging but is not showing signs of collapse.

Builders continue to face higher costs and cautious customers, but forward workloads remain relatively resilient.

Master Builders says the priority now is making it easier for viable projects to move from the planning stage to construction, while giving homeowners greater certainty over cost, timing and completion.