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123RF The construction sector wants the government to sign construction projects.
Commercial property owners and developers warn that about 60 percent of all planned construction and development projects are now uncertain and the sector needed government help.
They said billions of dollars in development could be canceled or postponed and that would decimate the construction sector.
It followed its call five weeks ago for the government to sign construction projects for commercial buildings, high-rise apartments, hotels, shopping centers, and office blocks.
Property Council Executive Director Leonie Freeman said a survey by the Property Council to its owner and developer members found that 60 percent of planned multi-billion dollar projects were uncertain given the current economic climate.
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Leonie Freeman, executive director of the Property Council, warns that 60 percent of construction projects are uncertain.
“These statistics demonstrate the developer’s natural reaction to uncertainty. This result could have a huge impact on the construction sector and the New Zealand economy as a whole,” Freeman said.
Industrial and commercial property developers were very cautious, noting that 70 percent of the projects were uncertain, while residential developers indicated that about half of all projects were uncertain.
“We have very real concerns about the impact this may have on the construction industry and related sectors.”
“The last thing we need right now is for developers to pull out of projects that could have seen the construction sector and the broader economy supported during the post-Covid recovery,” Freeman said.
Naylor Love CEO Rick Herd said the vertical and residential construction sectors that accounted for more than 80 percent of the entire construction industry were 80 percent financed by private sector owners.
“Unless the government finds the means to support and stimulate private sector construction, we will see a collapse of the vertical construction sector on a larger scale than what occurred after the 1987 stock market crash,” said Herd.
“This will mean the collapse of numerous companies, particularly SMEs, and the loss of jobs for more than 100,000 people.”
He said the government’s offer of cheap loans of $ 100,000 to SMEs was short-sighted.
“If these SMEs operate in the vertical construction sector, they will likely collapse, which means a huge burden of bad debt for the taxpayer.
“Why not look longer term and use this money to stimulate investment in private sector construction and construction for a sustainable commercial property and long-term construction industry, rather than alleviating pain in the short term. term, “Herd said.
“We need to see some positive action in the next two or three weeks or a month to see what the government will actually do to stimulate that investment from the private sector.”
