Building industry downturn could cost 45,000 jobs as construction halves

Concerns about failures in the building industry are beginning to be backed up by statistics.

Nearly a quarter of all liquidations last month were businesses from the building and construction sector.

Simplicity Living’s Shane Brealey said within six months the construction of new homes will halve and the industry will basically “fall off a cliff”.

He believes the industry could lose up to 45,000 jobs.

The downturn in the industry is likely caused by high-interest rates, a lack of supplies and a drop in immigration.

Construction does seem to be booming now but that’s because of investment that dates back to the good times.

“The last sales were about November of ’21 and since then sales have fallen off a cliff,” Brealey told Newshub.

Brealey, who’s constructing 350 homes for Simplicity Living, said the smaller builds have already stopped and the bigger ones are tapering.

“It’s definitely coming, there is a big drop-off. We’re in for a very lean period in residential construction commencing about now in the stick build and in the multi-unit residential about the middle of next year.”

Forty-five thousand new houses will be built this year but Brealey said that will drop to around 25,000 to 20,000 with an inevitable knock-on for employment.

“Ninety-thousand are in the construction sector, somewhere between 40 to 45,000 over the next year, year-and-a-half could no longer be required.”

A BusinessDesk analysis shows 42 of the 186 companies put into liquidation in November were in the building and construction industry and 14 of them were property companies.

Simplicity Living is a different beast. As a build-to-rent portfolio creator, they don’t need pre-sales.

“In a roundabout almost selfish way this isn’t a bad thing to be happening and going on land prices will improve and construction costs will hopefully improve,” Brealey said.