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12 Oct 2022

Sector Experts Warn of Construction Fiasco Amidst New Zealand’s Building Boom

Experts from across the construction industry are strongly suggesting that the current building boom may lead to another construction saga, much like the leaky homes crisis from a few decades ago.

The Chief Executive of New Zealand Certified Builders, Malcolm Fleming, is one such industry expert warning that the industry is being put under immense pressure amidst this current boom. So much so that sometimes there were untrained and unqualified tradies being asked to do work that they did not have the skillset for.

This problem is clear in recent figures published by Stats NZ which shows that new consents for homes has increased 24 percent from December of 2021; with an increase of this size last seen as far back as in 1974.

Malcom Fleming said that these statistics indicate the issue of consumer demand exceeding the sector’s supply. But on a more positive note, he also remarked that as the demand drops for builders and becomes closer aligned with the workforce supply, homeowners will be able to undertake more due diligence in choosing the builder that they select for their project.

Fleming stated that anyone can call themselves a builder, regardless of their qualification. So processes such as thorough checks of the builders’ qualifications and assessing whether they’re a member of a trade association, are key steps that homeowners are overlooking amidst this boom.

As a result of this, Roger Levie from the Home-Owners and Buyers Association said that building standards are therefore lapsing, and the quality of builds was becoming a real issue.

Issues such as structural insecurities, leaky deck membranes, and recent builds requiring significant structural improvement from third parties.

To better gauge these problems, building policy manager Amy Moorhead from the Ministry of Business, Innovation, and Employment, said that the Ministry was introducing a new code of ethics in October after reassessing the Licensed Building Practitioner Scheme that was brought in following the leaky homes crisis.

This new code of ethics means that builders who are found to behave unprofessionally would face greater disciplinary action which, in some cases, could see their building licenses revoked. Moorhead stated that the Ministry was still looking at more methods they could introduce to strengthen the new scheme.

Drawing a direct parallel between the current problems and the leaky homes crisis, author Peter Dyer who has written extensively on the leaky homes crisis, cautioned that the current boom was leading to a similar such scenario.

He stated that he would be surprised if there weren’t a greater number of leaky buildings or buildings with other structural deficiencies due to the pressure on builders to get the job done. Which is leading to unskilled and unsupervised workers working in a frenzy to meet deadlines.

And these fears may already be materialising, with a couple from Wellington looking to buy their first home turning to legal advice on the week that they were supposed to settle.

During the pre-settlement inspection, merely four days before settlement, the couple discovered gaps between the tiles and the wall in the bathroom; cuts and other marks on the walls; paint left on the door handles; paint spilled on the carpet; and missing grout.

The couple said they expected that they would need to do some small touch ups, but they were shocked at the extent of the substandard finishing quality in the home. The developer assured them that he would fix the issues, but he provided no timeframe and no apology.

They were left feeling let down after having spent so much time saving to achieve the milestone of purchasing their first home, an experience that should be exciting and not flecked with disappointment. Nevertheless, the couple still settled, and by the time they moved in some of the issues had been fixed.

Yet, stories like this and the observations of industry experts from all over the construction sector paint a concerning picture of the state of quality assurance and workforce stresses amidst this building boom. If pressure isn’t taken off the sector, these stories will only become more frequent.

The code of ethics that the MBIE is implementing to filter out builders who are behaving unprofessionally will hopefully be a positive first step in alleviating some of the sector’s stresses. But if it does not go as far in alleviating the pressure that the sector needs, then we may well find ourselves echoing the leaky homes crisis, with substandard builds and unhappy homeowners.

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