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Reduced consumer spending. Finding talent. Rising interest rates. Inflation. Supply chain challenges. Escalating global conflict. To say doing business is difficult in New Zealand (or anywhere) right now is an understatement.

The recent EBOSS Builder Sentiment Report reveals a stark outlook for New Zealand's property sector. According to the report, 70% of builders anticipate a decline in building activity over the next 12 months, with 62% of respondents citing the current economic climate as a significant concern in the residential market. This widespread pessimism underscores the urgent need for targeted interventions to stabilise the industry and prevent further decline. If left unaddressed, this negative sentiment risks not only stalling the construction of much-needed residential dwellings but it could also prompt a potential exodus of skilled tradespeople seeking opportunities abroad. As one respondent in the report noted, "The lack of certainty is pushing good people out of the industry," highlighting the immediate need for solutions that can restore confidence and retain talent. Why Build to Rent? Build to Rent (BTR) offers a unique opportunity to address two pressing issues simultaneously: the shortage of affordable housing and the current lull in construction demand. The EBOSS report identifies a "softening market" as a major challenge, with the majority of builders expecting fewer new builds in the coming year. BTR developments, which involve constructing residential properties specifically for long-term rental, can provide a steady stream of quality housing for New Zealanders while keeping the construction sector active. However, the economic conditions and prevailing uncertainty have made New Zealand less attractive to institutional investors who might fund these large-scale projects. By introducing targeted incentives, such as rebates on qualifying BTR expenditures or tax breaks for large-scale residential developments, the Government could significantly improve the financial viability of these projects. This would not only attract much-needed investment but also ensure that the building sector remains engaged, even during periods of economic downturn. Preventing a talent drain The EBOSS report notes 45% of builders are considering reducing staff numbers, a move that could lead to a significant drain of expertise from the industry. If domestic opportunities continue to dwindle, there is a real danger our most qualified and experienced workers will seek employment overseas, leaving New Zealand ill-prepared to meet future demand when economic conditions eventually normalise. By incentivising BTR projects, the Government can help maintain a robust pipeline of work for builders and tradespeople. This, in turn, will keep our skilled workforce engaged and prevent a depletion of expertise that could otherwise take years to recover from. The long-term nature of BTR projects means that once established, these developments will continue to generate employment and economic activity, creating a more resilient property sector overall. The challenges facing New Zealand's property sector are significant, but they are not insurmountable. The EBOSS Builder Sentiment Report clearly illustrates the depth of concern within the industry. By taking a proactive approach and implementing targeted incentives, the Government can help steer the industry through this period of uncertainty. Incentivising Build to Rent projects represents a strategic investment in the future of both our housing market and our construction workforce. It is a solution that not only addresses immediate concerns but also lays the foundation for a more stable and prosperous property sector in the years to come.

Dan Lowe says uncertainty is the enemy of confidence and investment and that when it comes to property and construction, continuous tinkering with tax settings has made the sector an easy target.

In the lead up to last year’s Budget, we wrote about a build-to-rent asset class to incentivise the construction of long-term rentals – and it actually happened. So while we’re on a roll, for Budget 2023 we’re going to be even more ambitious.

Some massive opportunities left in the wake of NZ's most recent natural disasters.

The Commerce Commission’s year-long Market Study into Residential Building Supplies was released in early December 2022, and the conclusion is a masterclass in understatement: competition “is not working as well as it could”.

A recent series of property and construction sector forums hosted by Grant Thornton New Zealand provided insights into some of the biggest talking points across the sector. Expert panellists provided a deep dive into the industry from the perspective of developers, financiers, property lawyers, agencies and the Property Council NZ.

New Zealand needs rental properties that give tenants a better experience, so let’s incentivise the creation of build-to-rent-communities, says Dan Lowe, Partner, and Property & Construction Leader.

When we look back at this time in our lives, it will be a significant milestone of change across the world. For each New Zealander, it might be the fork in the road where you decided to spend more time with your family.

Here in New Zealand, we still only have a few known cases of coronavirus, which is encouraging. However, the economic symptoms of COVID-19 are likely to be extremely widespread – and they may be just as tough to recover from. This outbreak has highlighted just how dependent our economy is on the rest of the world, both in terms of our export market and how much of our product is sourced from and manufactured offshore.

To achieve a successful sale of a business and extract its maximum value, it’s critical that the planning process begins well in advance.

Doing business in the United States is now harder for Kiwi businesses already operating there, or for those planning to tap into this market.

An increasing number of property investors are steering away from the traditional landlord model and favouring short term accommodation in the ‘sharing economy’.

Budget 2018: If it walks like a duck and quacks like a duck, it’s probably a tax, says Grant Thornton’s Dan Lowe.