“I look back at the the period from after the GFC [Global Financial Crisis] through to Covid, and it looks very stable now. And you go, ‘wow, why didn’t we just really take advantage of that?’ But that’s with hindsight – it still felt uncertain. There’s no predicting the future,” Dann says.
Dann says the city’s current malaise can’t be explained by any single event.
In 2024, hopes of a rebound were undermined by rising interest rates. In 2025, confidence took a hit from global tariff uncertainty. This year, the Iran conflict and rising oil prices have pushed a recovery a little further into the future.
“Some economists think the quarter we’re in right now will be a contraction. At best, it’s going to be very flat,” Dann says.
For businesses already struggling through a prolonged downturn, the repeated false starts are taking a toll.
“That’s psychologically a real blow to retailers, people running food outlets, hospitality, all that sort of thing,” Dann says.
The effects are particularly visible in Auckland’s construction sector. The city is home to around a third of the country’s population, but is suffering 60% of the construction job losses.
“ You can just see, when you walk around Auckland, it’s not booming. There aren’t cranes up over the skyline, and it affects the whole economy both in a direct sense in terms of there are fewer people employed, so we’ve got higher unemployment in Auckland because there’s construction workers and builders and tradies with not enough work,” Dann says.
The health of Auckland’s economy also relies heavily on the service sector, which in turn relies heavily on a buoyant property market.
“A large chunk of that service sector runs around the property sector. So it’s people who do landscaping, roofing fixing up your house. And when property owners as they are now, aren’t feeling good about the value of their property they’re less likely to invest in doing all those upgrades and all that sort of stuff that keeps people employed in Auckland,” Dann says.
While downturns are a natural part of the economic cycle, the prolonged nature of the current slump is a less common occurrence.
“I think in Auckland it’s been recessionary. Certainly a per capita recession, or a recessionary vibe for five or four years,” Dann says.
“That’s pretty tough. That’s getting historically unusual.”
Despite the gloomy outlook, Dann remains convinced Auckland will eventually rebound. He believes there is still significant demand waiting on the sidelines, with developers and investors poised to move when conditions improve.
“It would be surprising if in the next couple of years, maybe three years from now, there wasn’t a sort of a flip side, a boom and cranes back up on the skyline,” Dann says.
“I certainly haven’t given up on Auckland.”
Listen to the full episode to hear more on:
- Why Dann believes major infrastructure projects need bipartisan political support
- Why Wellington’s downturn is even bleaker than Auckland’s
- Why Auckland’s slump could finally break New Zealand’s obsession with property investment
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5pm. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.