New Zealand is poised to implement measures aimed at alleviating the surge in construction costs by facilitating the use of overseas building products, announced Prime Minister Christopher Luxon on Thursday. In response to a staggering 41% increase in building costs since 2019, attributed in part to soaring material prices, the government aims to foster greater competition in the construction sector.
The construction industry in New Zealand faced significant challenges, notably in 2022, when a shortage of plasterboard hindered house building endeavors. The dominant producer, Fletcher Building, struggled to keep pace with demand, leading to disruptions in construction activities across the country. Recognizing the pressing need for solutions to address such obstacles, Prime Minister Luxon emphasized the importance of enhancing competition in the market during a news conference.
Under the proposed changes, the New Zealand government plans to streamline the process for incorporating overseas building products into construction projects. This involves recognizing building materials from trusted foreign jurisdictions and granting authorities responsible for certifying new builds the flexibility to accept products meeting specified international standards. Additionally, the government intends to approve building products certified through reputable foreign schemes, further diversifying the range of options available in the domestic market.
Julien Leys, the Chief Executive of the New Zealand Building Industry Federation, welcomed the initiative while emphasizing the importance of effectively implementing the recognition of overseas accreditation industries. While optimistic about the potential benefits of increased product availability, Leys cautioned that substantial cost reductions might take time to materialize. He highlighted the need for careful execution and monitoring to ensure the smooth integration of foreign building products into the local construction landscape.
However, market leader Fletcher Building declined to provide commentary on the proposed changes, indicating a reserved stance amidst the forthcoming adjustments in the industry.
The move to facilitate the use of overseas building products underscores the government’s commitment to addressing the challenges facing the construction sector in New Zealand. By promoting competition and expanding the pool of available materials, policymakers aim to mitigate cost pressures and foster a more resilient and dynamic construction industry.
While the immediate impact of these measures remains to be seen, stakeholders anticipate a gradual transition towards a more diverse and competitive market environment. As the implementation unfolds, industry players will closely monitor developments, assessing the effectiveness of the regulatory changes in driving down construction costs and improving accessibility to quality building materials.
In conclusion, the decision to remove barriers for construction companies to utilize overseas building products marks a significant step towards addressing the challenges plaguing the construction industry in New Zealand. With careful planning and execution, these measures have the potential to stimulate innovation, enhance competitiveness, and ultimately contribute to a more sustainable and affordable construction sector in the country.
