29 Jan 2015

Call for building regulation review

5:39 am on 29 January 2015

The Registered Master Building Association is calling for building regulations to be reviewed due to the cost they impose on new homes.

130114. Photo Diego Opatowski / RNZ. Generic Housing images. Builders working on a construction.

Photo: RNZ

A study funded by the Building Research Association of New Zealand, the Registered Master Builders Association and research firm Construction Stategy Group, weighed up the regulatory challenges of building a typical 145 square metre stand-alone house in Auckland costing about $567,000.

The report found major regulation costs related to land availability, subdivisions, and getting resource consent could add:

  • $35,000 to $77,4000 to the upfront cost of the house
  • $134,000 to $266,000 in mortgage payments on an average loan
  • 3.5 to 6.8 years to the time it took to pay back a home loan

Registered Master Building Association chief executive David Kelly said these costs had not been enough of a consideration before new rules were passed.

"One of the things that we're concerned about is that there are a range of regulations that come in from a range of different government agencies and then of course we have local government costs as well.

Mr Kelly said he hoped the report would prompt makers to question whether there was value in some of the regulations that were passed.

"So we'd like to see a much harder look at it, some more standardization across the country in terms of what's required; in particular the cost implication for housing affordability. "

Another study in regulation cost, by Motu research group, was released by Treasury last week among a flurry of Government announcements around the Resource Management Act (RMA).

The report found the impact of regulations was estimated to vary between $32,500 and $60,000 per dwelling in a subdivision and between $65,000 and $110,000 per apartment.

Building and Housing Minister Nick Smith said the study also showed the requirements of the Resource Management Act (RMA) added $30,000 extra to each apartment and at least $15,000 per section.

In its current overhaul of the RMA the Government has included housing affordability as a priority.