Building products are set to get cheaper – over time
Building products will not get cheaper overnight due to Building Act changes that eliminate barriers to the use of overseas building products, but their costs will go down over time.
The Government has announced it will be making changes to ensure building product standards from other trusted countries are recognised by removing a “costly, time-consuming” requirement for builders to verify the standards.
It will also require Building Consent Authorities to accept products that comply with these overseas standards. Reputable overseas certification schemes, such as WaterMark in Australia will also be approved.
Building Industry Federation chief executive Julien Leys said the planned changes to the Building Act were good news as they would make it easier for more products to be brought into the country. But the devil was in the detail, and that would come when the legislation was introduced into Parliament later this year, he said.
“How will we ensure that standards from ‘trusted’ overseas jurisdictions are in line with our Building Act and Code, and that overseas evaluations meet our building regulations and requirements?
“The process involved will be explained in the legislation. But there are a number of different international standard organisations and also accredited agencies, such as CodeMark.”
It was a matter of lining them up, and streamlining processes so it could be ensured that the products certified offshore did not need to be certified again in New Zealand, he said. “It is a bit thorny, but it is achievable, and doable.
“There might be a bit more risk, so people will need to do their research, and make sure products they want to bring in do meet the required standards.”
The changes would help bring prices down as more products come on to the market, he said.
“In about one to two years time, we will be seeing cheaper building products, and a more streamlined system.”
The changes stem from the Commerce Commission report into the building supplies market. One of its recommendations was that barriers which made it hard to introduce new building products into the market should be removed.
Combined Building Supplies Co-operative director Carl Taylor said his organisation represented 1500 shareholders, and had been vocal when the Commerce Commission was doing its report.
He applauded the minister for what he was doing to improve access to more building products and reduce costs, and was looking forward to seeing the results in a couple of years time.
“If an Australian supplier can come here because their products are aligned with the New Zealand building code that can only be good for everyone as it will allow us to build more cost effective housing.”
But there was a long way to go, and more changes were needed before the industry got to that point, he said.
“It was just two years ago that we had the Gib shortage which froze the industry, and that came down to there being just one supplier. That needs to be addressed.
“Also, councils will need to recognise the new certified products coming in, and consent them as they come through. Otherwise, it is just a waste of everyone’s time.”
Construction Products director Richard Vickers said construction costs were out of control, and it was slow and bureaucratic to get anything done when it came to building in New Zealand.
The planned changes would give people more options and flexibility, so they were a good step towards addressing some of the problems, he said.
“It is extremely frustrating when you can only go through one channel to get a product, like Gib, and then there are hold-ups, and it impacts on costs,” he said. “Ultimately, it will make products cheaper because there has been a monopoly in certain areas, and it is time to break that up.”
Some people might be upset by that, but it meant prices would eventually come down as companies would be forced to keep up with international price points, he said.
Fletcher Building, manufacturer of Gib and other building products, was approached for comment but declined.
2degrees founder Tex Edwards, who fronts lobby group Monopoly Watch, said the changes were just one of several small steps by the new Government that could lead to a big leap forward in housing affordability.
He pointed to the reduction of the building levy, the enquiry into Kāinga Ora financing, and the Commerce Commission investigation into plaster board distribution as some other steps. “These recently announced steps illustrate clear Cabinet comprehension that construction is death by 1000 cuts, and that many initiatives are needed to solve the cost of construction debacle in this country.”
It all amounted to a sensible start to the marathon work required to fix New Zealand’s $25 billion home construction sector, he said.
“But more work needs to be done in productivity analysis, and adopting international best practice off-site manufacturing targets and scalable production similar to Sweden, Canada and Ireland.”
With a break up of the building product monopoly in Gib plasterboard, not only would prices come down, but productivity would improve dramatically too, he said.
“Private companies create monopolies, these sensible steps by the Government on building materials will protect consumers from historic monopolisation which has extorted them.”