The Front Page: Why is it so slow and expensive to build in NZ – and how do you fix it?

Building homes in New Zealand is slow and expensive. Photo / Getty Images

New Zealand’s housing shortage has long been acknowledged across the political spectrum, but building in Aotearoa remains expensive and painfully slow.

Add to this a backlogged supply chain, local opposition to intensification and growing concerns over climate change and you end up with a complex situation that politicians have grappled with for years.

John Tookey, a professor at the AUT School of Future Environments, tells The Front Page podcast that New Zealand’s building sector is a victim of the tyranny of distance in both the local and international context.

“The reality is we’re a small economy built a long way from anywhere else,” says Tookey.

“We’re about 2000km from our closest neighbour. And as a result, we’re in a situation where anything that’s not built locally takes time to come in and it takes time to mobilise.”

New Zealand also doesn’t have the benefit of economies of scale seen across Europe or Asia, which allow for greater production at a faster rate. Alongside this issue, we also have the problem of the existing housing stock not being up to the standards expected of a modern home – as reflected in ongoing problems with damp, uninsulated homes.

“You’re dealing with a large catalogue of houses built many years ago. They don’t disappear, they’re always going to be there. Unless you have an uptick in the number of demolitions or removals of old housing, they’re always going to have them in circulation until they run their course.”

The Government did try to address some of these issues with its Kiwibuild programme, but the results fell well short of expectations.

“It’s all very well the Government saying they’re going to pop their finger on the scale and dictate terms to how expensive a house is going to be, but the reality is that as soon as they declare they’re going to develop in a certain area, land values go up and therefore costs go up.”

While the Government did try to help first-home buyers get on to the property ladder, it was still at the mercy of a market running hot.

“The market is what the market is,” says Tookey.

“It costs a certain amount of money to deliver a house of a particular size in a particular location. That is a fact – and you can’t have it both ways. You either have to go full toss and go down the route of having a Ministry or Works, where you as a Government procure all the materials and procure all the services and deliver stuff or you’re going to let the market provide. You can’t do both.”

Developers have, however, invested heavily in recent years to build more, increasing housing density. Tookey says this is good from a housing stock perspective, but he worries about the lack of investment in infrastructure to accommodate the increase in population.

“There tends to be a lag effect associated with the investment necessary… If you look around some of the development zones, there’s been a massive expansion in terms of the amount of housing, either planned, consented or currently in operation. And yet, the stormwater management systems have been relatively slow to keep up.”

This problem extends beyond this to roads, schools, hospitals and public transport. But Tookey says that this lag is to be expected in rapidly expanding cities, like Auckland.

So what will improve our housing policies? What should we take into consideration when building infrastructure? Should New Zealanders get used to the idea of living in apartments? And does the country need to adjust its aspirations to what can actually be achieved in the local market?

Listen to today’s episode of The Front Page podcast to hear Tookey answer these questions and more.