Almost $700 million in pollution and power bill savings could be lost if KiwiBuild Homes are made to only meet New Zealand's minimum building standards, a report says.
It said the Government's plan to construct 100,000 "affordable" KiwiBuild homes, priced at up to $650,000, provided a chance to help raise national building standards.
To do this, the homes should be built to a higher quality, independent standard, called Homestar, rather than the New Zealand Building Code, the report by economic consultants Sense Partners said.
Overall savings by doing so could total $680m, with KiwiBuild home owners saving on electricity and water bills and the community benefiting from reduced climate change pollution, waste and water runoff.
Report author Shamubeel Eaqub said it was an economic "no brainer" to build the homes to a higher standard, despite the increased up front costs.
He said KiwiBuild's scale of construction would drive down costs, while also enhancing capability in the housing sector.
"We have to start now, else we will be locking in inefficiencies for many decades to come," he said.
With the release of the report and its presentation at industry forum The Housing Summit
on Wednesday, further questions are likely to be raised about New Zealand's building code.
The is recognised as lagging behind international standards, having been criticised by the International Energy Agency and the Organisation for Economic Cooperation and Development, the report said.
Andrew Eagles, chief executive of the New Zealand Green Building Council, which oversees Homestar, said the Government must seize the opportunity to construct the KiwiBuild homes to a higher standard than the Building Code.
"Doing so will deliver higher quality homes and millions of dollars of benefits for New Zealanders," he said.
He said the Homestar standard measures the health, warmth and efficiency of New Zealand houses.
Homes that score a rating of six or higher "will be better quality - warmer, drier, healthier and cost less to run - than a typical new house built to [the] building code", he said.