Residential construction costs to be scrutinised

A market study into residential construction costs has been released today for public input by the Government.

“The costs of building a house in New Zealand are too high as identified by the Productivity Commission’s report. This issues paper and market study is about identifying why some house construction costs are as much as 30 per cent more expensive than Australia and how we can get costs down,” Housing Minister Dr Nick Smith said.

Commerce Minister Craig Foss said the issues paper is primarily focused on improving competition and productivity.

“The competition work focuses on potential barriers to effective competition within the building materials and services market, while the productivity work focusses on factors to improve the overall productivity of the residential construction sector,” Mr Foss said.

The Ministers said the issues paper will help inform the first steps of the market level study by the Ministry for Business, Innovation and Employment and the Commerce Commission. The Ministers are due to report back to Cabinet later this year on proposed solutions to the problem.

“There is no single silver bullet to making New Zealand housing more affordable. This work builds on the Auckland Housing Accord, in which a commitment was made to examine materials and construction costs. We need to address all of the issues from land, infrastructure, materials, labour, and compliance costs if we are to achieve our goal of more affordable housing.

Submissions on the Residential Construction Sector Market Study issues paper close on 10 June 2013.

For further information please see attached Issues Paper.