New Zealand to reform consent process to spur building industry
The government wants to reinvigorate the industry as a tries to revive a sluggish economic recovery
[WELLINGTON] New Zealand will reform key aspects of the nation’s building approvals process, betting that the changes will speed up consenting and remove roadblocks to new construction.
The government plans to scrap the existing liability framework, which potentially saddles local councils with meeting the cost of defects, and replace it with proportionate liability, Building and Construction Minister Chris Penk said on Monday (Aug 18) in Wellington. Officials will explore professional indemnity insurance and home warranty schemes to ensure home owners remain protected, he said.
New Zealand’s sluggish consenting system is delaying projects and driving up costs, making the average standalone house 50 per cent more expensive to build than in Australia, Penk said. Construction contracted 9.3 per cent in the 12 months to March, shedding jobs and forcing many firms to close, and the government wants to reinvigorate the industry as a tries to revive a sluggish economic recovery.
“The building sector has the potential to be an economic powerhouse, yet productivity has stalled since 1985 despite major advances in building methods and technology,” said Penk. “We must eliminate system blockages to speed up the delivery of new homes and infrastructure.”
Penk argues councils are hesitant to sign off on building consents and inspections because they may be held liable for all defects if a building company fails. That leads to delays and extra costs for builders and homeowners, he said.
Under the new model, each party will only be responsible for the share of work they carried out, Penk said. To achieve the change, the government will amend the Building Act, with new legislation to be introduced in early 2026.
That law change will also allow councils to merge their building consent authorities to streamline decision-making and cut costs, he said. Currently, there are 66 authorities across the country, often with different interpretations of the rules.
“It is ridiculous that builders, designers and homeowners must navigate 66 different interpretations of the Building Code because of the number of building consent authorities across the country,” Penk said. “Builders can be rejected on paperwork that would be accepted by a neighbouring authority simply because each one applies the rules differently.” BLOOMBERG
Share with us your feedback on BT's products and services
