Building Houses In New Zealand – Simpler, Better, And Faster

Westpac’s Industry Economist Paul Clark says that with the economy set to slow over the coming year, the building industry not only needs to get its financial house in order but should also be positioning itself for sustainable long-term sources of growth.

“Achieving sustainable growth though requires transformational change, which in turn means large-scale investment in new processes and digital technologies,” Mr Clark says.

“For many the size of investment needed will be prohibitive. Add to that the small size of the New Zealand market, and relatively high returns already enjoyed by the sector, and it’s perhaps not surprising that there is limited appetite for seismic change.”

“However, meaningful change within the building industry is still achievable,” Mr Clark says.

“Some elements of onsite building work could be pushed back up the value chain. Not unlike what happens in the global vehicle manufacturing sector, manufacturing ecosystems would work together to produce standardised fabricated building elements that builders would install onsite.”

“There is also scope for more imports of modular units from countries that are better able to generate economies of scale. While there are challenges to overcome, we think that this is where the sector will ultimately end up.”

“Looking ahead, the sector is likely to consist of a smaller number of firms,” Mr Clark says.

“However, they will increasingly be installers rather than the builders as we know them today. Focussing more on delivering a customer experience, these firms are likely to be larger, better resourced, and more resilient to the boom-and-bust investment cycle that currently characterises the sector.”

© Scoop Media