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Building and construction industry

by Carl Walrond

As New Zealand’s towns grew, they needed builders to construct houses, shops and public buildings. While many building firms remained small and family-owned, some grew into large companies with varied interests.


Early builders

Māori had centuries of building experience in New Zealand constructing whare (dwellings), meeting houses, pātaka (storehouses) and other structures, mostly out of timber.

Thirty-two ‘mechanics’ (a general term for users of tools) arrived in Auckland with colonial governor William Hobson from the Bay of Islands in 1840. They included eight carpenters, two masons, two sawyers, one brickmaker and one bricklayer. In 1862 there were 153 builders and carpenters in Christchurch.

A growth area

Early authorities, such as the New Zealand Company in the 1840s, and the government in the 1870s, offered immigration assistance to builders. Settlers needed houses and shops, and skilled tradesmen were needed to build larger public buildings such as post offices, pubs, churches and cathedrals. Tenders were let, and self-employed builders and contractors put in bids. Carpenters employed by builders were so sought-after that they were able to insist on improved working hours – eight hours a day, Monday to Saturday.

As towns grew in the 1870s and 1880s, there was a boom in suburban land speculators, builders and companies supplying building materials.

Subdivisions and speculators

Farmland on town edges was bought by companies and builders. Firms such as the Remuera Land and Building Company of the 1880s were speculative enterprises rather than actual building operations. Four land-speculation companies were registered in Auckland between 1908 and 1919, with 14 more between 1922 and 1925. The companies bought land, subdivided it and sold the plots. Shareholders were mainly builders, lawyers and accountants.

Most builders constructed houses or public buildings on contract. Some also speculated by buying plots, building houses and selling them. In Wellington Harry Crump built 156 houses in Mt Cook and Newtown between 1892 and 1908. In the 1920s prospective house-buyers could take out cheap housing loans from the government – and builders encouraged people to do this.

The communist menace

 

In the 1920s the government promoted home ownership in the suburbs as a way to create stable communities and good citizens. A. Leigh Hunt, vice-president of the Greater Wellington Town-Planning Association, commented: ‘If a decent man is unable to secure a home for himself and family, he is likely to become Bolshevik in his ideas and a menace to the community.’

 

In Auckland, during the 1920s suburban housing boom, many small private building companies were set up, including Bungalows Ltd (1923), Construction (1925) and Garden Homes Construction (1928). Shareholders were typically builders and urban investors. Few had any real capital and their level of business expertise was not high. The biggest company of this period, Suburban Homes and Investments, a public company founded in 1927, lasted only two years.

Depression and recovery

Economic depression hit the building industry in late 1927, and it took 11 years for the value of building work to reach pre-depression levels. From the late 1930s, when the government accelerated its commitment to building state (public) housing, there were more contracts for builders. The commercial building sector was also boosted by local and central government investment in infrastructure. Residential construction became a smaller part of total building work during the 1950s and 1960s as the growth of industry and services demanded factories, offices, schools and hospitals.

Company structures

Some ambitious building contractors – especially those involved in large speculative residential developments – incorporated as private companies, but they did not survive the 1930s depression. The few publicly listed building companies operating in New Zealand in the 1920s and 1930s were largely confined to contracts to build offices or public buildings. Most building companies remained small family businesses or partnerships. Yet a handful of businesses were headed by more ambitious people who wanted to build companies as well as buildings.

Footnotes
    • National Town Planning Conference, Proceedings, 1919, p. 219. Back

Commercial construction companies

Residential construction is dominated by small building contractors and companies or franchises. Commercial construction involves larger companies with specialist skills and huge resources in terms of equipment, workforce and access to capital.

Building innovator

 

James Fletcher pioneered the New Zealand use of electric winches to get bricks and other materials to the upper storeys of buildings. In 1937, with George Winstone, Fletcher introduced ready-mix concrete to New Zealand – years before it was available in Australia. He was also the first to use the tubular steel scaffolding system.

 

Fletcher Construction

Scottish immigrant James Fletcher arrived in Dunedin in 1908 with his carpentry tools. He set up a company with Englishman Albert Morris, building a wooden house for a storekeeper at Broad Bay. The profit was only three shillings and sixpence ($26.15 in 2009 terms) out of the total price of £375. Morris soon left and Fletcher found more profitable contracts. Within three years the company took on bigger local projects such as a town hall, municipal baths and a three-storey office block. At the other end of the country it built the Auckland city markets. James and his son Jim (who took over the company in the 1940s) continually looked outward for construction opportunities.

By the 1930s Fletchers was one of the country’s biggest construction companies. During the 1930s and 1940s it built more than 6,000 out of a total 30,000 state houses. It became a public company in 1940, and diversified into pulp-and-paper manufacturing in the 1950s and civil engineering in the 1960s. The company grew into a huge multinational with increasingly diverse interests, yet in the early 2000s it still retained its commercial building interests as a division called Fletcher Construction.

Downer Construction

Downer Construction began as a civil-engineering firm established by contractors Arnold Downer and George McLean in the early 1900s. In the 1950s Downers was mainly involved in earthworks, tunnelling and heavy concreting. From the 1970s it diversified into commercial building. The company completed Hutt Hospital’s clinical services block in 1980. In the early 2000s it was known as Downer EDI Engineering and still had a commercial building arm.

The long commute

 

Christchurch builder Charles Luney never had an overdraft facility. It probably helped save him from going under during the 1930s depression – as did his willingness to travel. Luney took on a Nelson job as Canterbury contracts dried up. He would leave the Nelson building site at 6 p.m. on Saturday after working six days, arriving home at 2 a.m. He spent Sunday with his family, attended to Christchurch business on Monday and then drove to Nelson that night, arriving early on Tuesday morning.

 

Chas S. Luney

Charles Luney started his Christchurch building company in the late 1920s, focusing on commercial rather than residential building. Over the 1930s his company won contracts to build cool stores and other buildings for freezing works. It went on to build many well-known buildings such as the Dunedin dental school and Christchurch’s town hall, public library and Princess Margaret Hospital. Some large projects such as Christchurch’s Parkroyal Hotel (now the Crowne Plaza) and the Christchurch Hospital refurbishment were conducted as joint ventures with Fletcher Construction.

Mainzeal

Mainzeal Property and Construction was established in 1968 to work on Auckland Harbour Board’s redevelopment of the downtown area. In Auckland it built structures such as the Vector Arena (now Spark Arena) entertainment centre and the Botany Town Centre shopping precinct. In 2009 Mainzeal constructed new departure lounges at Wellington International Airport.

Hawkins Construction

Hamilton carpenter Fred Hawkins opened for business in 1946 with partners Bill Nash and Cliff Thompson. The company took on commercial jobs building dairy factories, and in 1950 was successful in its tender to build a pulp and paper mill at Kinleith for New Zealand Forest Products. In 1951 the company listed on the New Zealand stock exchange. It moved its head office to Auckland in 1988, the same year it built the Auckland International Airport terminal.

Naylor Love

In 1910 Hugh Naylor and James Love each set up building companies in Dunedin. The two companies constructed many commercial buildings in the southern South Island including the Dunedin town hall and the Evening Star building. They merged as Naylor Love in 1969. In the early 2000s the company employed some 350 staff and had an annual turnover exceeding $160 million.

Brookfield Multiplex

Australian-based construction company Multiplex established an Auckland office in 1997. It changed its name to Brookfield Multiplex in 2008. The company managed several big Auckland projects and has worked on constructing Pegasus, a new town north of Christchurch. In 2009 Brookfield Multiplex was building the Deloitte centre, a 23-storey office building in Queen St, Auckland.


Residential construction companies

Villas, bungalows and state houses

Stand-alone houses in suburbs – most of them very similar – were mainly built by small-scale builders.

Early companies were based around the materials rather than the building process. In Auckland in the late 1880s, companies included the New Zealand Timber Company, the Union Steam Saw, Moulding, Sash and Door Company, and the large Kauri Timber Company. They produced catalogues of prefabricated products and plans for villas. Rising timber and labour costs in the 1920s led to the simpler, cheaper Californian-style bungalow which replaced the ornamented, timber-hungry villa. State houses, most of them three-bedroom designs, were built during the 1930s and 1940s. They were simple weatherboard or brick houses constructed by large firms and small building contractors.

Prefabricated houses

After the Second World War residential building companies were set up to mass-produce prefabricated houses. Firms such as Beazley Homes and Neil Housing emerged in the 1960s, assisted by the government’s Group Building Scheme. The scheme guaranteed the purchase of finished houses, and encouraged off-site construction to reduce costs and increase building speed. In the early 2000s companies such as Golden Homes, Signature Homes, David Reid Homes, Keith Hay Homes and many others, offered complete house-building packages with varied designs.

Lockwood

Lockwood manufactures and builds kit-set wooden houses. The company was established in Rotorua after two Dutch immigrants, structural engineer Jo La Grouw and marketer Johannes (Jan) van Loghem, arrived in New Zealand in 1951. They saw an opportunity to sell kit-set houses using exotic timber from central North Island plantations. By the early 2000s over 22,000 homes had been built, in many different designs. The company also designed and constructed commercial buildings such as Rotorua’s Agrodome. In the 2000s Lockwood remained a family business and employed over 100 people at its 10-hectare Rotorua site.

Keith Hay Homes

Keith Hay built his first transportable house in 1949 during a housing shortage. He developed a method of moving buildings in large pieces which did not require dismantling. Hay formed Keith Hay Homes to quickly and cheaply produce prefabricated houses from radiata pine. In the 2000s the company was based in Mt Roskill, Auckland, and had 10 branches throughout the country. It had built some 20,000 houses.

David Reid Homes

David Reid Homes was founded in 1993, and became a nationwide network of franchised branches. In the 2000s the company focused on building houses that were architecturally designed and more expensive (over $400,000). In early 2009 the Wellington franchise went into voluntary liquidation following a fall in demand for new houses.


The building profession and process

Builders

In the early 2000s builders were still predominantly male. In 2008 carpenters, joiners and builders earned close to the national average of $38,900. Construction managers earned $74,200, while builders’ labourers ($32,500) and general labourers ($25,500) were paid much less. Apprenticeships remained an effective way for young people to enter the industry.

The building industry is typified by boom and bust cycles – work is sometimes hard to find, and at other times builders must turn down jobs.

Master builders

The Federation of Master Builders was founded in 1892. By the 2000s there were 22 regional associations. Builders and companies that meet certain standards of workmanship and business practice can apply for membership as registered master builders, who offer a guarantee on their work. Around 1,800 companies, with over 15,000 employees and subcontractors, were master builders in the early 2000s. They accounted for some 65% of annual construction spending ($7.5 billion out of $12 billion per year).

The building process

The process usually begins with a client who wants a new house built, or an existing house added onto or altered. An architect or draughtsperson draws up a plan, which is sent to the local council for building consent. Once consent is granted the client approaches a builder or puts the job out for tender.

There are thousands of individual builders and many companies offering their services on a contract basis to the public. Most clients contract a builder who also acts as a project manager. The contract usually specifies timelines, materials and the budget. Builders then often subcontract parts of the job out to electricians, plumbers, tilers, plasterers and flooring contractors.

Building Act 2004 and Building Code

The Building Act 2004 sets out the law for the construction, alteration, demolition and maintenance of new and existing buildings. The Building Code sets minimum standards that all new building work must meet, but does not prescribe how buildings should be designed or constructed. Plans and specifications are assessed by local councils to ensure they comply with the code before a consent is issued. Councils employ building inspectors who inspect work during and after construction, and issue certificates which attest that the work is compliant with the Building Code.

Female apprentices

 

In the early 2000s more women were taking up apprenticeships in building – traditionally a very male profession. In 2005 Richard Gibb of HRS Construction in Christchurch had some advice for other building firms looking to employ a female apprentice: ‘Don’t!’ he said. ‘Then we [the company] can pick them up.’1 Gibb said he had seen some women apprentices with outstanding skills.

 

Disputes processes

Clients who have problems with builders can make claims through the court system. If the work was done by a registered master builder their federation offers a guarantee on issues such as non-completion, defective workmanship, rot and structural defects.

Leaky building syndrome

From the mid-1990s thousands of houses were built using methods that have not kept out the rain. Many were Mediterranean-style, with flat roofs, no eaves and solid balustrades. Moisture got trapped behind cladding types such as fibrous plaster or stucco. Fungus grew and wood rotted. Many factors contributed including the less stringent Building Code of the Building Act 1991, using untested new materials (such as untreated timber framing), new architectural trends, cost-cutting developers and poor building practices. Councils signed off on poor building work as did private building certifiers. The Building Code was meant to be overseen by the Building Industry Authority, a government agency that was poorly funded.

The Weathertight Homes Resolution Service was set up in December 2002 to help leaky-house owners, yet it had few powers. Local councils, the Building Industry Authority, developers, builders and architects all blamed each other. When home owners tried to get compensation through the courts they often found that the builders had gone bankrupt or the companies had been dissolved. Some owners settled out of court for less than the cost of repairs.

In 2006 the Weathertight Homes Resolution Services Act established the Weathertight Homes Tribunal, which adjudicates disputes over leaky houses that were built or altered in the previous 10 years.

Footnotes

Hononga, rauemi nō waho

More suggestions and sources


How to cite this page: Carl Walrond, 'Building and construction industry', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/building-and-construction-industry/print (accessed 22 November 2019)

He kōrero nā Carl Walrond, i tāngia i te 11 Mar 2010