By Laurie Atkinson, Planner, Baseline Group | May 12, 2025
If you were not already aware, the New Zealand dollar (NZD) has been depreciating against the US dollar (USD). This recent weakness of the NZD against the USD is reshaping the landscape for development projects across the country. Many of the key materials — including steel, electrical components, and specialist fittings — are priced in USD, meaning a weaker NZD drives up the cost of imported goods. This is adding pressure to a wide range of projects, particularly large-scale residential and infrastructure developments that rely heavily on overseas-sourced materials.
Projects committed to fixed-price contracts or staged developments budgeted months ago are particularly vulnerable. These developments are facing tighter margins as rising material costs weren't built into original budgets. With limited pricing flexibility, many developers are now under pressure to either absorb costs or consider redesigns and delays.
Opportunities Amongst Market Uncertainty
Despite the challenges, this period of market uncertainty presents opportunities for versatile and prepared developers. Projects across New Zealand may be paused or deferred, reducing competition, opening up access to contractors, improving council processing timelines, and easing capacity constraints. Those who are ready to act can take advantage of better timing, improved contractor availability, and faster approvals.
At the same time, the currency shift is benefiting export-aligned and rural sectors. Industries like wine, meat, and wool are gaining international competitiveness, creating momentum for investment in rural infrastructure and subdivision developments. Developers and landowners in export-focused regions may find this an ideal time to explore new opportunities.
Navigating Market Uncertainty
In this environment, early engagement with planners, engineers, project managers and quantity surveyors is essential. Getting ahead of the curve allows for:
- Realistic budgeting that accounts for currency volatility
- Flexible project phasing to adapt to changing market conditions
- Exploring alternative, locally sourced materials to reduce import reliance
Planning ahead is no longer optional — it’s a critical part of managing financial risk and ensuring project viability.
In today’s climate, early-stage planning isn’t just beneficial — it’s vital. Cost blowouts and delays are more likely, and developers need to ensure their applications are well-prepared, compliant, and council-ready. Strong upfront preparation helps projects move forward efficiently and reduces the risk of last-minute issues amongst currency volatility.
How Baseline Group Can Help
Baseline Group partners with developers from the outset to deliver cost-sensitive, future-proofed solutions. We offer early-stage guidance, smart design strategies, and practical coordination to meet council expectations. Our integrated approach helps clients navigate shifting conditions, manage financial risk, and keep projects on track.
In a volatile environment, those who act early, stay flexible, and plan efficiently are best positioned for success. Let Baseline Group help you stay ahead of the curve.
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