John Beveridge: Chinese lesson in how we can rebuild housing

An artist s impression of the Park Hyatt Hotel in Auckland. Photo / Supplied

Opinion

The announcement that high-end Chinese hotel developer Fu Wah sees importing 200 Chinese workers to complete the Park Hyatt Hotel as the solution to the skills shortage in Auckland construction has caused a stir locally.

Many Kiwis view Chinese-made or built as inferior to anything our builders can knock up. That bias looks naive when you consider the leaky-buildings and shoddy Christchurch quake repair problems.

Protective local-industry chatter is that it is cheap labour and how can the current political environment tolerate it? It would be wise for the Government to have a close look at it, not to shut it down but with an eye to the pending Kiwi Build promises of a 100,000 affordable homes.

These imported workers will be well honed in the fit-out of this five-star hotel because they will be using standardised pre-fabricated products and installation techniques. They will deliver a high-quality product in way less time than a bunch of locals. The Chinese will move like a Formula One pit crew because they are well practised in this style of fit-out. They will work long and hard to get it done for much less cost.

The big learning for lowering the cost of residential building is standardisation.

Kiwi Build is planning to deliver 16,000 houses in the next three years over and above the current level of activity and the only way they can get close to that is in honing local building crews' speed by standardising design and installation to drive down cost and complexity. Cost is not just building material but delays and slow-moving, bespoke, one-off design.

We are so customised we need to reinvent the wheel for almost every house built. Most houses require a site measurement for the likes of windows, bathroom and kitchen fit-out.

Standardised design gets rid of this costly bottleneck. You make off the plan and schedule installation with much more certainty. Builders or installers get faster and better at doing the same thing over and over. The process becomes supported by clever software that records the quality, warranties and maintenance over the life cycle of the house.

In New Zealand we already prefabricate the likes of frame and truss, windows, kitchens and bathrooms. The problem is we make a lot of one-offs.

The building trade has a large, established investment in site building that will not change in a hurry to off-site, factory-built, panelised housing.

The answer is a modern redesign of the familiar and durable state house. In 1973 we built 39,611 houses, which was 9000 more than today's maxed-out market. Most were simple one-bathroom, one-kitchen, three- bedroom, standard-design state houses that didn't leak.

Using modern materials and maybe 10 different designs we could easily reach the Kiwi Build targets. Procurement and productivity gains would dramatically lower the cost.

The Chinese can teach us a lot in this domain. We should embrace this move and learn from it. I am sure some large contractors who are losing hundreds of millions using old-school Kiwi methods would love to follow the Chinese move.

The commercial-building competitive landscape is already changing to pre-made kitchen and bathroom pods, which can be of a high quality but mass-produced and installed.

The large-scale Kiwi Build programme gives the local residential building trade the chance to rewire the whole industry to achieve a higher-quality, lower-cost house - but only if we standardise.

• John Beveridge is a director of several building related companies and a former CEO of Placemakers.