Building sector says it needs urgent change, issues challenge to next government

The building industry is calling for urgent action from the next government so it does not remain stuck in a cycle of boom and bust.

Master Builders which represents both residential and commercial builders has released new research today titled Building a Better New Zealand: Election Manifesto 2023.

The industry wants housing to be designated as critical infrastructure, public building and infrastructure projects to be prioritised during down-cycles and for consenting to be sped up.

Its chief executive David Kelly told Nine to Noon more builders would fail and the necessary homes, school and hospitals would not get built if changes were not made.

Building consenting had been an issue for up to 20 years and it was getting in the way of improved productivity, he said.

"With building consenting it's all about policing rather than incentivising builders and designers to do a good job ... and those who are doing a good job that can show that they have a good track record, give them a better pathway through and those who are not - the cowboys in other words - they should pay."

It would be a disaster if it was a free-for-all in terms of consenting, Kelly said.

"But those good players who have a very good track record, who document their systems, they can show they have design processes and quality assurance both through design and on site - and you audit them, so if they step out of line then they're back right into the pack with everyone else."

Part of the problem was that there was no consistency around the country with 67 building consenting authorities in New Zealand, he said.

"So there are weeks and weeks of delays and the same consent, or the same plan could be put in to two different councils and get a quite different outcome."

There were also delays in building inspections and it was not uncommon for it to take several weeks to get one, he said.

A consultation process is underway regarding the building consenting process and it was moving in the right direction but quite slowly, he said.

Master Builders was talking about the issue now due to the coming election in the hope that any new government would not scrap what had been done to date and start again, Kelly said.

"For goodness sake, let's keep going, let's get this done and we'll lock it in."

Kelly said he did not believe there had been proper housing policy for more than 30 years in New Zealand.

The country had generally focused on social or state housing and the Ministry of Housing and Urban Development had been making some progress in that area in the last few years, he said.

"However, given that it's such a big sector we don't have one ministry or department that does all of it - the rest of it around delivery and so on is spread across other agencies.

"We think it would be much more efficient and effective if we had one ministry that did all of that and ideally also a senior minister that's looking across housing and construction and infrastructure."

Currently Megan Woods' portfolios cover housing, as well as building and construction.

Kelly said having one minister covering those issues had been effective and the industry would like to see it continue, but would also like to see infrastructure included.

NZ's boom and bust housing cycle

Kelly said figures in the report showed that New Zealand's housing sector was extremely volatile.

As a result the industry ended up being comprised of a lot of small to medium sized businesses because that was a way to manage risk, he said.

"The reason that companies keep the small size is that if they grow too fast then the work goes, they've got a big problem."

At times the government had exacerbated the situation by stopping its own capital programmes when there was an economic downturn, he said.

"So they do less work whether that's through state housing, or education or health or whatever. Less work, more companies go broke, we lose more people."

The government then decides to start building when the upturn comes which overheats the market, he said.

The government would get better prices and availability of builders during an economic downturn so should not stop building at that time, he said.

Kelly said he would like to see government's apprenticeship scheme locked in and continued as a permanent scheme.

"Apprenticeship boost gives support to both the trainers and their employers, their employers are important because that's where most of the learning happens on site, during work."

It was important for governments to make changes to building standards in order to address climate change in a way that allowed people and manufacturers to get ready for it, he said.

"In terms of how we build, in terms of things like sustainability, product sustainability, insulation of homes et cetera, do that in a thoughtful way with sufficient time for people to get ready for it."

The building sector is looking to design a system that can be rolled out across building sites to address plastic waste in the construction sector, he said.

"What we need from the government is - where's the market and where are the regional infrastructure facilities that we need so that it can be done across New Zealand."