September 19th, 2024

Building supply sector to see increased competition following new government measures

Key actions will involve the monitoring and publication of key building supplies prices, improving guidance to aid builders and councils in making informed decisions regarding alternative equivalent products.

The government is set to expand on the Commission’s recommendations by widening its review of the building consent system and facilitating the use of alternative building products, an issue that came into sharp focus following last year’s plasterboard shortage.
The government is set to expand on the Commission’s recommendations by widening its review of the building consent system and facilitating the use of alternative building products, an issue that came into sharp focus following last year’s plasterboard shortage.

As part of an effort to enhance competition and transparency in the realm of building supplies, the New Zealand government has announced its response to the Commerce Commission’s market study into Residential Building Supplies.

Dr Megan Woods, the Minister for Building and Construction, and Dr Duncan Webb, the Minister of Commerce and Consumer Affairs, announced that the government concurs, or agrees-in-principle, with eight of the nine recommendations made by the Commission.

Key actions will involve the monitoring and publication of key building supplies prices, improving guidance to aid builders and councils in making informed decisions regarding alternative equivalent products, and encouraging the uptake of offsite manufacturing by Government agencies by a minimum of 10% year on year.

Dr Woods expressed concern over the current state of competition in the building supplies market.

“This has to change. We need to remove market barriers that make it hard to introduce new building products and for competing suppliers to expand their businesses. This drives up costs and means homeowners end up paying more than they should. At a time when the cost of living is hurting families, that needs to improve,” she said.

The government is set to expand on the Commission’s recommendations by widening its review of the building consent system and facilitating the use of alternative building products, an issue that came into sharp focus following last year’s plasterboard shortage.

Efforts to address the issues identified in the report are already underway, including the establishment of a Critical Materials Taskforce to explore supply-constrained building materials and market imbalances, and the introduction of a Construction Sector Accord Plan to tackle the sector’s challenges.

The government is also set to consult on an economy-wide review into the use of land covenants, with Dr Webb noting that such agreements can often obstruct new businesses and limit competition.

“Competition is a driver of lower prices and better quality – good for businesses and consumers. Now we’re going to look across the whole economy at how these agreements are being used and whether changes need to be made to level the playing field for new businesses,” he said.