Building industry needs fresh thinking to reduce costs

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The Productivity Commission reported in 2012 that it costs 15% to 25% more to build a house in New Zealand than in Australia.

That finding is backed up by Rawlinson’s guide to building costs, which showed the mid-range cost of an Auckland home that year was $1650 per square metre compared with $1175 in Melbourne.

A 2014 New Zealand Institute of Economic Research report found New Zealand was around 8% more expensive than Australia for a medium standard home.

Tony Sewell, chief executive of Ngai Tahu Property, the South Island’s biggest property company, says the cost of building good quality, low-cost housing in California is about $600 per square metre compared with about $1500 in New Zealand.*

Houses are more expensive here because much of the New Zealand building industry uses old-fashioned, inefficient building practices, and is incentivised by building product suppliers to continue to use their products rather than switching to new, better alternatives.

Freeflow Pipes manufactures patented aluminium downpipes that are part of a wave of innovative products and building approaches that are helping to drive down the cost of new houses and commercial buildings.

Our company’s pipes are only a small component of a building, but their superior flow rate means fewer downpipes are needed, resulting in big savings in drainage systems.

Using our downpipes can save about $800 on a typical house — more on bigger buildings.

If you extend that smart thinking to every other facet of a house, you can achieve substantial savings and better quality buildings. But we need the building industry to be ready to embrace new ideas, new products and new building methods.

The New Zealand building industry needs to shake out old, entrenched sloppy practices and inducements that inflate the cost of new houses.
A number of building companies — including Golden Homes, Mike Greer Homes and Ryman Healthcare — are changing the industry by introducing effective and efficient building practices to reduce costs while using only high quality building materials and fittings. But many other builders are lagging behind.

A number of factors need to be addressed to reduce the cost of housing and make it more affordable for ordinary Kiwis. These are:

Similarly, factory production of pre-ordered house components reduces the cost of housing while improving the quality. Factory production does not mean houses cannot be personalised, just that detailed specifications are needed.

The building industry needs to move much faster from being a “cottage industry” where houses are built piece-by-piece on-site, often with many variations along the way, to high-tech, low-waste, factory-style production that will not only be less costly but of a higher quality.

*www.listener.co.nz/current-affairs/money/why-its-more-expensive-to-build-in-nz-than-in-australia/

http://qvgroup.qv.co.nz/construction-cost-information

www.mbie.govt.nz/what-we-do/housing/residential-construction-sector-market-study

http://www.prefabnz.com/