According to recent studies, the cost of construction rose this year. This in turn has prompted the demand for home renovations to decline. Incredibly, this is the first time in years that construction costs have outpaced renovation demands!

Contractor confidence in the market for home improvements and repairs is measured through a weighted average of several factors. These include current market conditions, future market conditions, and recent changes in business conditions. A score significantly above 50% indicates that the majority of contractors view market conditions as favorable.

This year, contractor confidence was only slightly above 50% and it has continued to decline, coinciding with increased construction costs. This makes sense, given that contractors are less likely to undertake renovation projects knowing that they’ll pay more for materials and labour.

What’s driving the increase in construction costs?

There are a few factors at play here. First, the cost of lumber has been on the rise due to tariffs — one of the most commonly used building materials in the country. Labour costs are also on the rise. Unemployment has reached record lows, meaning workers have more bargaining power.

What does this mean for property developers?

For starters, you’ll need to factor in increased costs for materials and labour. Secondly, it’s worth keeping an eye on the contractor confidence score — that way you can get a sense of how other contractors are feeling about undertaking new projects. If the score remains low, it could mean that there’s less demand for renovations overall. This could then lead to lower prices for fixer-upper properties.

As the increase in construction costs is having a ripple effect on the housing market, as a property developer, it’s important to factor these in when planning any property flipping or major renovations.


Your Outside Team



Need a bit of assistance with your business? Contact an Outside Accounting team member today and learn more about our fixed fees. You won’t regret it.

Aside from business consultation, we are business accountants Wellington who offer accountingbookkeepingpayroll services designed to help you achieve greater financial success.

You can click here to speak to a businessaccounting and bookkeeping firm. We will give you a call to know more about your needs. We will explain to you how we can improve your business.




Wellington Accountants | 

Business Accountants | 

Construction Accountants 

Property Accountants 

Contractor Accountants 

Hospitality Accountants |

Property Developer Accountants | Accountants Wellington | Wellington Accountant | Restaurant Accountants | Cafe Accountants

AddressLevel 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand 

Mail: PO Box 24-457, Wellington 6142

Phone04 889 2975

New Zealand Accounting, Bookkeeping & Property Business Consultancy Services | Wellington & Lower Hutt Xero Property Accountants Business coach business consultation business adviser

Business Accountants: Understanding Changes in Residential Property Taxation

Recent years have seen significant adjustments to the tax landscape, particularly concerning residential property. The government has responded to calls from various quarters to address investor demand in this sector. Notably, recent changes have been initiated to reverse tax policies affecting residential property, aligning with promises made by both National and ACT during their election campaigns.

Read More »