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Cautious period ahead for builders

Media Release

29 July 2008

Registered Master Builders predicts cautious period ahead for builders

The building industry is entering “a cautious couple of months”, according to Pieter Burghout, chief executive of the Registered Master Builders Federation.

Building consent figures for June released today showed a significant softening of demand – the value of residential work was 34% lower than in June 2007, and non-residential work was down by 18%. 

Having said that, for the year ending June 2008 residential work was down by 6% on the previous year, while non-residential work had increased by 7.4% for the same period.

Mr Burghout noted that in June last year the industry was still coming down from the peak of a prolonged period of booming demand, and the current softening in the market was part of the natural economic cycle. 

“The year-on-year data shows the residential market continues to soften slowly, but builders are also a little bit cautious that the big drop in consent numbers for the month of June might be indicative of further troubled times to come,” Mr Burghout said.

“While it’s perhaps too late now, we have been asking for some time for the Government to get serious about sorting the constraints facing our sector – improving the availability of land for development, reducing compliance costs, increasing Government infrastructure spending, and a significant boost in immigration are all positive actions that it could take.

“Another reduction in the Reserve Bank’s official cash rate during the next couple of months wouldn’t hurt either.”

RMBF is still predicting that the residential building sector will pick up again in early 2009, and that the commercial sector will remain relatively strong overall throughout the year. 

“Clearly now is a perfect time for people to be thinking about engaging a builder as their work schedules begin to free up.  Consumers should also ensure that they use a Registered Master Builder backed up by the independent Master Build Guarantee, just in case anything goes wrong during or after the project.”



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