2023 – Insights from New Zealand’s Building Industry and Changes I Hope to See in 2024

2023 - Insights from New Zealand's Building Industry and Changes I Hope to See in 2024


2023 Highlights

I was fortunate enough to visit Europe’s biggest building Expo BAU, in Munich in 2023. I witnessed the best-of-the-best building systems, products, and modular builds. I explored over 18 expansive halls, each large enough to house an Airbus A380. Of these, two halls dedicated to extraordinary modular and panelised building systems caught most of my attention. Other halls showcased mass timber and innovative ways of integrating electronics and plumbing systems into more advanced building systems. It was exhausting, yet exhilarating, to interact with the manufacturers’ sales and management teams from each company, listening to their innovation timelines, new product developments, and goals for the next 5 years.

After Munich, I travelled to Milan Design Week, particularly to Salone del Mobile, where I saw the crème de la crème of European interior design fixtures and furnishings. One of the halls showcased an innovation area where up and coming designers showcased their use of alternative materials in design. There were some great examples that could really become mainstream one day.

One of the themes in Milan was material sustainability, and although I saw a lot of marketing from the bigger more reputable brands, I sadly didn’t see much evidence in the products themselves. I feel greenwashing is still alive and well.

After Milan I spent a few days in Rome where I had some meetings with an architecture firm and a new digital project team. Seeing the history of architecture and the use of new materials over time was simply mesmerising. If you ever get a chance visit the colosseum and look at how it was repaired over the centuries using what were innovative materials of the time.

Back To Earth With a…

Upon returning to New Zealand, I was again struck by the disparity between the building industry here and in western Europe and Scandinavia. I once said many years ago that I felt the gap between Europe and Australasia in terms of the use of better building systems, products, and building practices is between 20 and 30 years, and I’m sorry to say that I don’t feel we have closed that gap at all yet.

What I will say in New Zealand’s building industry’s defense is there are a handfull of companies trying to introduce and use new products and building systems, however, they are finding the virtual red tape challenging, slow, and costly. I have seen some very sucessfull single residential projects where designers have taken it upon themselves to import their own products, and designing in a way that compliments those products and building systems. There was also a large modular multiunit development in Auckland that the apartments were shipped complete from Vietnam. This project ruffled a few feathers from the competition, but ultimately for me at least is deemed a success. I hope the councils support innovative developers like these more in 2024.

So it’s a given that the quality, efficiency, and product selection in Germany far surpasses what is generally available in New Zealand and most other countries today. So, why is New Zealand struggling to close the gap? Well, I have my own opinions, but I asked my team to canvas a few leaders of New Zealand’s building industry, ranging from Engineers and Architects to Manufacturers and retailers the same question, and here are the top 5 responses we collected, in no particular order:

1) Supply Chain : New Zealand’s supply chain monopoly controls what we build and how we build.

2) Councils: Our councils are still too slow, costly, and struggle with any building consent that utilises anything other than the most basic and commonly found products in New Zealand.

3) Planning: We are building houses in the wrong places where infrastructure is already under pressure.

4) Government Strategy: 2023’s outgoing government didn’t seem to employ a strategy to tie immigration, jobs, and housing into new underdeveloped areas of New Zealand. For example, there doesn’t seem to be any incentives for businesses to move out of our densely populated hubs in favour of developing new opportunities elsewhere.

5) Trends: The New Zealand building industry is not equipped for change, nor has the appetite for change.

While I agree with most of these points, I also recognize that as long as builders around the world are making money, there’s little incentive for change, after all, rinsing and repeating is the easiest option. This is why most building companies persist in using the same building methods year after year. It’s only when times get tough that the more astute look to companies improve their practices, offer new products and services, and attract to new customers. 

A bank lends you an umbrella when it’s sunny, and asks for it back when it rains

Unfortunately, there is still considerable negativity in New Zealand’s building industry. Over the last six years, we’ve seen talent and good businesses leave New Zealand without being replaced. A telling point was when HSBC, one of the biggest mortgage lenders globally, abruptly closed its doors on New Zealand. This was 2023’s ‘wow’ moment for me, after all, a bank lends you an umbrella when it’s sunny, and asks for it back when it rains – so if HSBC aren’t deemed to be making enough profit on their mortgage portfolio then I don’t know who is.

How can our new government start addressing these issues? In my opinion, we need more competition and need to make it easier for industry professionals and consumers to source better and more affordable products and building systems in New Zealand. This includes stopping the requirement for recertifying already certified products from recognized global authorities, and stop the wholesale use of treated timber throughout our builds when it’s not necessary. Besides the health concerns, this just plays into our monopolies hands and raises the cost of construction.

A salesperson for a certification company based here in New Zealand told me that New Zealand needs to recertify foreign products because New Zealand experiences unique conditions. I’m still scratching my head trying to work out what they are.

Here are some topics that I feel we need to address and fix in New Zealand in 2024:

Councils

If we can’t take the building consent process out of the Council’s hands, or at least offer alternative means to administer consents, then let’s put an independent body in place to oversee our councils. Let’s for the first time truly hold the council to account for consent processing times, staff knowledge, and results. If they do not meet set KPI’s then introduce measures that will, or find people that will.

Manufacturing

I feel we need to increase manufacturing capability onshore. We need to learn from other countries and invest in our own capability. We also need to invite offshore companies to invest in New Zealand by offering manufacturing capability here. This drives more competition and choice – and lowers pricing.

Building Systems and Practices


We need to find ways of introducing tried and tested building systems to New Zealand and find ways to insure and finance them properly.

Housing Department – Kianga Ora

We’ve seen a phenomenal cost burden to New Zealand’s taxpayers by Kianga Ora for many years now – with no real picture on what they’ve achieved. Unfortunately, we saw them paying over the odds for properties that ultimately helped drive the housing market up. I saw properties built that lacked the most basic social amenities, that in my experience also has a detrimental effect of people’s privacy, wellbeing and mental health. It feels like Kianga Ora are robbing Peter to pay Paul. Remember the last Government spent $2B+ on mental health issues alone.

Importantly, we need Kianga Ora to be transparent about how much taxpayers money they spent and where they spent it, and how many properties were acquired and built for the taxpayers investment. I’m very interested to see what the cost per housing unit delivered is, and I would like to be pleasantly surprised.

Innovation, Grants and Growth

As we know good education drives innovation, which drives new business opportunities and growth. In 2023 we saw an incredible $10M government grant awarded to academic institutions by MBIE to assess and provide theoretical solutions for our building industry, yet we didn’t seem to ask the right people who actually work in the industry itself what was wrong and how we can fix it. And why award this grant at the end of a governments term?

Also, we lacked giving grants to pioneering young companies who have legitimate products and digital solutions that can make a real difference in the building industry. Instead, we lost a lot of this technology to Australia, North America and Europe. The grants system we do have is convoluted, administration heavy, and just not worth the application. In my opinion an overhaul is required.

2024 – Can We Reset?

In 2024, we need a strategy that involves proactive collaboration between trades, proper cross-industry liaison, and an openness to adopt from those who are leading the way. We need to provide competition to the councils, offer alternative means for building consent application processing, align our building code with our manufacturing capability, and national and international supply chain.

I, like many others see many constructive opportunities for New Zealand to grow without costing the earth to our taxpayers. In fact, we have ideas to recoup serious funds that will benefit businesses and our local communities. The challenge is do we have the public entities that want to listen and act? Our experience of dealing with MBIE for example fell well short of our expectations.

Most importantly, I feel we missed a great opportunity during Covid to reset and rethink our existing building code and related policies, so let’s do it now. New Zealand is a great country that has a great opportunity to be great again, however, our building industry and our public service entities need to borrow the acronym  “KISS” – keep it simple stupid!

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