Options released to bring down cost of home building materials

The Government is proposing increased transparency, simplified compliance, changes to anti-dumping duties and tariff concessions to bring down the cost of home building materials, Housing Minister Dr Nick Smith and Commerce Minister Craig Foss announced today.

“Building materials costs are too high and can be as much as 30 per cent more in New Zealand than in Australia according to the Productivity Commission. The industry needs a shake-up through increased competition and greater transparency to ensure kiwi families can get access to more fairly priced building materials and homes,” Dr Smith says

“Our market study has flushed out some very real issues in the building materials industry. I worry that high duties on some imported building products, combined with limited competition in New Zealand is allowing excessive margins by building product manufacturers. I also have concerns over a lack of transparency for consumers over what benefits builders are getting from using certain products,” Dr Smith says.

Commerce Minister Craig Foss says the Options Paper is the second round of consultation for this study, with an Issues Paper released in May.

“This paper identifies a range of barriers that could impact competition and productivity in the residential construction sector. The barriers appear to lead to a bias towards the continued use of ‘tried and true’ brands, products, methods, and systems. This impedes the ability of new firms to enter the market and of existing firms to innovate,” Mr Foss says.

“We strongly encourage feedback on the practicality and likely benefits of all of the options presented in this paper, before we make our final decisions,” Mr Foss says.

“Bringing down the cost of building materials is an important component of the Government’s major work programme to improve housing affordability. We are taking action on a range of fronts including freeing up land supply, reforming the RMA, reigning in council development charges, keeping interest rates lower for longer, investing in skills and productivity, and supporting first home buyers through changes to Welcome Home Loans and the KiwiSaver First Home Deposit Subsidy,” Dr Smith says.

Submissions to the Options Paper close on Wednesday 18 December.

The Options Paper can be viewed at http://www.mbie.govt.nz/about-us/consultation/consultation-on-residential-construction-sector-market-study