Labour is in short supply, material costs are rising and red tape is stickier than ever, so it is hardly surprising that the house construction industry is facing an affordability squeeze. But in trying to keep costs ‘affordable’, is the industry setting up the consumer to face significant additional costs in future decades?
And what information are we actually providing the consumer to help them make the decision of what a ‘quality’ home actually is?
This is just one of the key topics that will be discussed at the upcoming Asian Construction Forum 2019, happening at the Ellerslie Event Centre, Auckland, 29 June 2019.
CMS General Manager Ian Watt says that the ‘quality’ question is bound to be a source of intense discussion with top industry professionals challenging the industry to take a hard look at itself and to consider the quality of the housing stock being left for future generations.
“We’ve seen decades of repairs of homes from the ‘80s – 2,000s from weather tightness issues, we’re seeing thousands of homes being retrofitted with insulation to comply with new rental regulations, we’re seeing hundreds of buildings being earthquake strengthened…”
“And despite this, we’re seeing so many in the construction sector building homes to the minimum standard of compliance. Are the homes we are building just good enough, or is it time to rethink what a ‘quality’ home actually is?” Ian said.
One of the speakers, Matt Curtis Senior Research Analyst for BRANZ, says that building quality and performance issues are coming to the fore, not just in terms of safety and insulation, but to a greater holistic level.
“The big thing for me is that there’s a real difference between consumer perception and the actual performance clients are receiving.”
“They think because they’re buying a new house, it’s going to be warm and comfortable. But once they move in, they find it’s not as warm or as dry as they thought it was going to be.”
“The general public aren’t really aware of what a ‘code compliant building’ build to minimum standard of the code is actually going to deliver for them. All new houses seem to the consumer like they’re a homogeneous ‘good’ – it doesn’t matter what materials that are used, or how it’s built, they assume it’s going to perform like any other new house, whereas that’s not the case,” he said.
Curtis says that he’s advocating a certification system for homes, similar to a safety rating on a car or energy rating on appliances.
“If I’m buying a dishwasher, I can assess the water and energy performance and understand what I can get from that dishwasher, but we don’t really have that for a house,” he says.
So, would a ‘quality’ rating on a home result in a premium for better homes? Would a consumer opt for a 5-star smaller house rather than 3-star bigger house?
“I know in countries where they have a rating system like that, such as in the UK where they have an Energy Performance Certificate that rates homes between a standard of A – G, based on the energy needed to keep it warm or cool, the A-rated houses sell at a premium,” Curtis says.
“Some people are going to be happy with their C-rated house, that might be all they’re able to afford anyway, but those consumers who are looking at those additional features can make a purchase decision based on that – whereas at the moment it is hard for any consumer to make a considered choice.
If we don’t measure and build the benchmarks we’ll never improve, so it comes right back to what does quality construction look like? Give the consumers the tools so they can start driving these things,” he said.
Master Builders David Kelly says the risks of always building to the minimum are larger than simply consumer dissatisfaction.
“In the past the building code has been largely focussed safety and health – Safety is about protecting the people that occupy it, so they don’t get injured. Health has focused on keeping consumers warm and dry.”
“Changes in 2008 were as much about environmental sustainability and energy efficiency as they were health, but now, since the Christchurch and Kaikoura earthquakes, resilience is becoming much more important.”
“The New Zealand Insurance Council has led some of this discussion, as have EQC – from the insurance point of view, asking how well will a building perform in an event like an earthquake and is it easily repairable?”
“If they’re not comfortable they may simply say, ‘we’re not going to insure because that risk is too high’. And if the insurance companies say that the banks will say, ‘we’re not lending if you don’t have insurance’.”
Kelly says those things are starting to change in the commercial market and may well start to flow into the residential market – with insurers already thinking about things like earthquake risk, risk of floods and so on.
“So, I think it’s now right to ask, are we simply interested in people’s safety and their health? Or are we interested in broader economic impacts?” says Kelly.
“I think part of this is, where does the debate land between resilience, versus affordability. What things could be done relatively economically or with a small incremental cost, but give a much better result over the lifetime of the buildings for the occupant? That’s the debate I think we need to have, and say, well where’s the sweet spot that we can achieve both?”
The Asian Construction Forum is to be held in Auckland at the Ellerslie Event Centre on Saturday 29 June 2019. This leading trade event brings together leading industry suppliers, peak industry bodies, local government, builders, architects, designers, developers and other industry participants to share information that’s vital to the success of the industry.
The Asian Construction Forum will be officially opened by the Hon. Jenny Salesa, MP for Manukau East, Minister for Building and Construction and Ethnic Communities and Associate Minister of Education, Health, and Housing and Urban Development.
Speakers include Jeff Fahrensohn, Auckland Council; Matthew Curtis, BRANZ; Andrew McKenzie, Prefab NZ; Greg Durkin, BCITO; Marco Wang, Jennian Homes; David Kelly, Registered Master Builders; Greg Watts, ADNZ; Frank Lee, Riverview Consulting; and Thomas Teh, Barfoot and Thompson.
To register, go to https://acfnz.co.nz/register/
