The Government is promising to tackle construction costs.

Stats NZ data shows the cost of building a house has increased by 41% since 2019, making housing even more unaffordable for Kiwi families.

Building and Construction Minister Chris Penk wants costs to go down.

He's vowing to streamline the consenting process, saying the little guys have been shut out because of red tape.

AUT'S Professor of Construction John Tookey told Kerre Woodham that the situation is more complicated than people think.

LISTEN ABOVE

The Government is promising to tackle construction costs. 
Stats NZ data shows the cost of building a house has increased by 41% since 2019, making housing even more unaffordable for Kiwi families. 
Building and Construction Minister Chris Penk wants costs to go down. 
He's vowing to streamline the consenting process, saying the little guys have been shut out because of red tape. 
AUT'S Professor of Construction John Tookey told Kerre Woodham that the situation is more complicated than people think. 
LISTEN ABOVE

Join Kerre Woodham one of New Zealand’s best loved personalities as she dishes up a bold, sharp and energetic show Monday to Friday 9am-12md on Newstalk ZB. News, opinion, analysis, lifestyle and entertainment – we’ve got your morning listening covered.

Kerre Woodham Mornings Podcast

John Tookey: AUT Professor of Construction on the Government's plan to tackle construction costs

We thought we'd start with the housing densification or de-densification that was announced yesterday. We didn't really get a chance to talk about it despite the fact that yesterday when the Prime Minister was in for an hour, he gave us a bit of an announcement of an announcement. 

“Long story short is what Chris will announce is a significant reduction in the capacity, which means that then actually that pressure of intensifying our suburbs in Auckland goes away. And what we want to see is intensification happening in the right places. Over the CBD, the transport hubs, the town centres, we should be densifying and putting more intensification. So where would the density occur? Should occur in the CBD, in the town centres, in the transport hubs that we've got across the across Auckland City, but not in the suburbs.” 

Didn't have to wait very long for the actual announcement, because a few hours later, Housing Minister Chris Bishop announced sweeping changes to housing densification in Auckland, with dwelling capacity being slashed from 2 million homes to 1.6 million. The housing intensification will still go ahead near transport hubs, rail corridors, and the CBD. Chris Bishop said yesterday that the 2 million housing figure had become a red herring that transformed into a lightning rod. Basically, people felt that 2 million houses would be put up right next door to them. That was the kind of irrational thinking behind it. There were concerns about who would be there, what sort of housing developments would go there, where people would shop, how people would get to work, where people would go to school. They were legitimate concerns, but there was, I agree with Chris Bishop, that 2 million suddenly became 2 million people will be next door to me. And he said the changes made yesterday were a response to public feedback. Hamish Firth, who you will have heard on this show before, who is most excellent, who is an urban planner, who was stolen by the Mike Hosking Breakfast this morning, said the changes announced by the Minister yesterday made sense. 

“What we've got to be very careful when you suddenly throw 2 million out there is you create paper capacity, but you're going to create community backlash, you're going to create land value distortion, and you're probably not going to create any extra homes, especially against the backdrop of what was a very well written Auckland Unitary Plan. At the end of the day, targets don't build houses, infrastructure and feasibility do. And what you'll find right now is a lot of high rise buildings are very expensive to build, and they only get built, as you're starting to see, in very high end areas where the developer can achieve a very high end outcome. So just because you can build to 50 doesn't mean many of these sites will or may, and I think that some thought has to go into that.”

Does this allay the fears you might have had about intensification of housing? Does the fact that the Government has listened show a government that is concerned and understands and appreciates the fears of well, many around the country, because what happens in Auckland quite often filters through to the rest of the country? That by being willing to listen, that shows, you know, a reasonable kind of a government. Labour was shouting about a u-turn and they've got it all wrong and they've had to backpedal. But a couple of texters yesterday, because I said to the Prime Minister yesterday, this just looks like you're looking after the voters in the leafy suburbs. And a couple of people from the leafy suburbs said it makes no sense to put people in areas where there is no transport hub, where there are no schools. And I think that's a perfectly valid point and I accept that. And when the PM said yesterday that you could pop up housing developments, you know, put 100 homes into an area without having to provide for transport, without having to provide for schools, there was no thought to it, you could just sell off the land and the council'd say, “Yeah, sure, you can turn that into a development," – that doesn't make sense either. There's got to be planning and forethought when you are putting in new homes. That's what will create a thriving community. Putting it around the transport hubs, great. Putting it in the CBD and the and the suburbs closest to the CBD, great. Watch new communities develop.  

Does that allay the fears that people had now? First home buyers, there have never been more of them right now, and that's pleasing. We never want to see the kind of rorting and speculation that we saw with housing prices, and an increase in supply will help mitigate that. And we don't want to see people stranded in the middle of nowhere in housing developments that have put a roof over their head but precious little else. So love to hear from you on this, especially if you had concerns at the time. Does this kind of tinkering with the plan, this kind of revisiting of the plan, is that a tick for the government to say, Okay, you took the feedback on, you listened," and does this make you perhaps less fearful of what housing intensification is going to look like, what providing homes for future New Zealanders looks like in the future. 

We thought we'd start with the housing densification or de-densification that was announced yesterday. We didn't really get a chance to talk about it despite the fact that yesterday when the Prime Minister was in for an hour, he gave us a bit of an announcement of an announcement.&nbsp;
“Long story short is what Chris will announce is a significant reduction in the capacity, which means that then actually that pressure of intensifying our suburbs in Auckland goes away. And what we want to see is intensification happening in the right places. Over the CBD, the transport hubs, the town centres, we should be densifying and putting more intensification. So where would the density occur? Should occur in the CBD, in the town centres, in the transport hubs that we've got across the across Auckland City, but not in the suburbs.”&nbsp;
Didn't have to wait very long for the actual announcement, because a few hours later, Housing Minister Chris Bishop announced sweeping changes to housing densification in Auckland, with dwelling capacity being slashed from 2 million homes to 1.6 million. The housing intensification will still go ahead near transport hubs, rail corridors, and the CBD. Chris Bishop said yesterday that the 2 million housing figure had become a red herring that transformed into a lightning rod. Basically, people felt that 2 million houses would be put up right next door to them. That was the kind of irrational thinking behind it. There were concerns about who would be there, what sort of housing developments would go there, where people would shop, how people would get to work, where people would go to school. They were legitimate concerns, but there was, I agree with Chris Bishop, that 2 million suddenly became 2 million people will be next door to me. And he said the changes made yesterday were a response to public feedback. Hamish Firth, who you will have heard on this show before, who is most excellent, who is an urban planner, who was stolen by the Mike Hosking Breakfast this morning, said the changes announced by the Minister yesterday made sense.&nbsp;
“What we've got to be very careful when you suddenly throw 2 million out there is you create paper capacity, but you're going to create community backlash, you're going to create land value distortion, and you're probably not going to create any extra homes, especially against the backdrop of what was a very well written Auckland Unitary Plan. At the end of the day, targets don't build houses, infrastructure and feasibility do. And what you'll find right now is a lot of high rise buildings are very expensive to build, and they only get built, as you're starting to see, in very high end areas where the developer can achieve a very high end outcome. So just because you can build to 50 doesn't mean many of these sites will or may, and I think that some thought has to go into that.”
Does this allay the fears you might have had about intensification of housing? Does the fact that the Government has listened show a government that is concerned and understands and appreciates the fears of well, many around the country, because what happens in Auckland quite often filters through to the rest of the country? That by being willing to listen, that shows, you know, a reasonable kind of a government. Labour was shouting about a u-turn and they've got it all wrong and they've had to backpedal. But a couple of texters yesterday, because I said to the Prime Minister yesterday, this just looks like you're looking after the voters in the leafy suburbs. And a couple of people from the leafy suburbs said it makes no sense to put people in areas where there is no transport hub, where there are no schools. And I think that's a perfectly valid point and I accept that. And when the PM said yesterday that you could pop up housing developments, you know, put 100 homes into an area without having to provide for transport, without having to provide for schools, there was no thought to it, you could just sell off the land and the council'd say, “Yeah, sure, you can turn that into a development," – that doesn't make sense either. There's got to be planning and forethought when you are putting in new homes. That's what will create a thriving community. Putting it around the transport hubs, great. Putting it in the CBD and the and the suburbs closest to the CBD, great. Watch new communities develop. &nbsp;
Does that allay the fears that people had now? First home buyers, there have never been more of them right now, and that's pleasing. We never want to see the kind of rorting and speculation that we saw with housing prices, and an increase in supply will help mitigate that. And we don't want to see people stranded in the middle of nowhere in housing developments that have put a roof over their head but precious little else. So love to hear from you on this, especially if you had concerns at the time. Does this kind of tinkering with the plan, this kind of revisiting of the plan, is that a tick for the government to say, Okay, you took the feedback on, you listened," and does this make you perhaps less fearful of what housing intensification is going to look like, what providing homes for future New Zealanders looks like in the future.&nbsp;

Kerre Woodham: Did the intensification announcement allay your fears?

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/fe287e20-d9dc-4a39-86c5-b3f70002207e/transcript

An unprecedented day continues for the UK, with Andrew Mountbatten-Windsor released under investigation after his arrest overnight. 

The former Prince has been pictured leaving a Norfolk police station following allegations he shared sensitive information with late sex-offender Jeffrey Epstein.  

Searches have taken place at addresses in Berkshire and Norfolk. 

His brother King Charles has stressed the law must take its course. 

UK Correspondent Gavin Grey told Kerre Woodham Mountbatten-Windsor is maintaining his complete innocence, despite this being only one of a number of police investigations around him. 

LISTEN ABOVE 

An unprecedented day continues for the UK, with Andrew Mountbatten-Windsor released under investigation after his arrest overnight.&nbsp;
The former Prince has been pictured leaving a Norfolk police station following allegations he shared sensitive information with late sex-offender Jeffrey Epstein. &nbsp;
Searches have taken place at addresses in Berkshire and Norfolk.&nbsp;
His brother King Charles has stressed the law must take its course.&nbsp;
UK Correspondent Gavin Grey told Kerre Woodham Mountbatten-Windsor is maintaining his complete innocence, despite this being only one of a number of police investigations around him.&nbsp;
LISTEN ABOVE&nbsp;

Gavin Grey: UK Correspondent on the arrest of Andrew Mountbatten-Windsor

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/47a13b1d-6a7c-466d-ae95-b3f601885d7e/transcript

The Official Cash Rate has been left unchanged, 2.25%, expected by all the commentators, but perhaps less expected was a dovish view of the future. It was the new Reserve Bank Governor's, well she's not that new I suppose, the newish Reserve Bank Governor's first OCR review, having come on board at the end of '25. She is pretty optimistic about the economy. She said it will continue to recover, but she understands that many households are not feeling it yet. Must be rather annoying being told, no, everything's fine, everything's turning around, everything's great, while you're looking down the back of the couch for coins to get the kids' school lunches.  

But there are great numbers coming out of our primary industry sector and thank God for you. Just take a moment on your tractor, in your shed, on the motorbike, in the fields, just take a little moment to have a big deep breath and consider yourself congratulated and thanked. Kiwifruit, dairy, sheep, beef, yet again that sector, our primary industry sector, is doing the heavy lifting to keep the engine of the economy running. How many times? And we should point out, you were doing it with one hand and one leg tied behind your back for much of the past decade. So thank you again for keeping us going, producing stuff that the rest of the world wants.  

However, we can't depend on you, we shouldn't be as reliant upon you as we all are. Trends change, markets change, you know, all of a sudden, the world will decide that, oh I don't know, refined sugar is the way to go, not protein, and all of a sudden, the world will change. Unlikely to go for refined sugar, but you know what I mean. You're also vulnerable to climate, you know, a good season needs good weather. You're vulnerable to external markets. To a certain extent you are not the author of your own fortune, you are very dependent on outside and external sources. And if you're dependent on that, so too are we. We need to find other strands, other sectors to build up. You know, technology would be ideal and we've made some great marks in that, bioscience, fantastic, but not houses.  

Let's not look at an unproductive sector of the economy to provide us with wealth again. House prices have come back a little in the North Island, Auckland's average asking price is once again over a million dollars, and you should see the tat you get for that. That's up 9% from December. Tale of two islands: Christchurch, Queenstown, Otago, Southland, all seen significant increases in prices. But the “drop in value” has seen a drop in confidence. Reserve Bank's Paul Conway says the reduced prominence of the wealth effect from higher house prices is a risk to the economic recovery. It's a big change, he says, for the New Zealand economy to not have that increase in house prices as a kicker to aggregate demand. He says there may well have been structural changes in the housing market that means an increase in demand for housing no longer equates with higher house prices.  

And it's true, for a couple of decades Kiwi property owners have been living off the wealth of their main asset. There were astronomical rises in the value of homes around the country and people felt wealthy and spent like they were wealthy. A chronic undersupply of homes, high migration, low interest rates saw huge rises in the value of homes around the country and so people spent like they were rich. All of a sudden, a home became far more than a place you lived in, it was an asset with equity which you could use to springboard yourself into wealth, as so many of the ads that we ran on this station told you. People spent like drunken sailors and the economy boomed. Fast track to the post Covid slump and people have seen their house prices drop – in some horrible cases they owe more on their house than they can sell it for. And as Paul Conway says, there may well have been structural changes to the housing market. High prices for the essentials means there's less disposable income in households and if one of you has been made redundant, it has been a tough few years. We've lost our groove. But as Reserve Bank Governor Dr. Anne Bremen told Mike Hosking this morning, there's enormous potential in the New Zealand economy and there are reasons to be optimistic. 

“I think it's a great economy. I think New Zealanders are underestimating actually the potential going forward in the New Zealand economy. We're already seeing some sectors doing really well, agriculture, manufacturing is starting going, and I do expect this to broaden in this year. So I'm very positive. We actually think there's quite a lot of what we call spare capacity in the economy, so we think that the economy can grow at a higher pace without causing so much inflationary pressure because there is still high unemployment, firms can increase, you know, manufacturing without having, they're starting to invest actually, which is also really good to see. So we do think there is spare capacity. And I know people, there is a lot of good potential in this economy. People should be a bit more optimistic.” 

There you go. So many people are telling us to be optimistic. We must be optimistic. We're all going to be optimistic, we're going to stay after class until we're all optimistic. Okay, I mean, a little bit hard when you've got the, you know, the infrastructure plan coming out yesterday which said that pretty much we need so much and we can't afford it. But there is room to grow in the economy as Dr. Bremen said, and as people know. But if you're not feeling it, you're not going to be spending.  

Back in the day when we were using our houses as ATMs, I mean I was one of them, we bought a house in Grey Lynn because it was the only place we could afford. I think it was about $250,000 —might have been closer to $300,000— which seemed a fortune at the time, but then the house price just went up and up and up so you could afford to do the renos. We could take it from an uninsulated place where the floorboards were open to the bare dirt floor underneath, as it had been since 1890. You could do the renos, you could do the landscaping of the garden, you were spending and New Zealand businesses were the ones who benefited from that.  

So if you're not doing that, where are the sustainable businesses going to get their work? If people don't feel confident enough about improving their homes or, you know, using the money that they've built up in their homes, how do you replace that quite significant chunk of money go round? Do you feel confident? Do you feel optimistic? Can you see light at the end of the tunnel? 

The Official Cash Rate has been left unchanged, 2.25%, expected by all the commentators, but perhaps less expected was a dovish view of the future. It was the new Reserve Bank Governor's, well she's not that new I suppose, the newish Reserve Bank Governor's first OCR review, having come on board at the end of '25. She is pretty optimistic about the economy. She said it will continue to recover, but she understands that many households are not feeling it yet. Must be rather annoying being told, no, everything's fine, everything's turning around, everything's great, while you're looking down the back of the couch for coins to get the kids' school lunches. &nbsp;
But there are great numbers coming out of our primary industry sector and thank God for you. Just take a moment on your tractor, in your shed, on the motorbike, in the fields, just take a little moment to have a big deep breath and consider yourself congratulated and thanked. Kiwifruit, dairy, sheep, beef, yet again that sector, our primary industry sector, is doing the heavy lifting to keep the engine of the economy running. How many times? And we should point out, you were doing it with one hand and one leg tied behind your back for much of the past decade. So thank you again for keeping us going, producing stuff that the rest of the world wants. &nbsp;
However, we can't depend on you, we shouldn't be as reliant upon you as we all are. Trends change, markets change, you know, all of a sudden, the world will decide that, oh I don't know, refined sugar is the way to go, not protein, and all of a sudden, the world will change. Unlikely to go for refined sugar, but you know what I mean. You're also vulnerable to climate, you know, a good season needs good weather. You're vulnerable to external markets. To a certain extent you are not the author of your own fortune, you are very dependent on outside and external sources. And if you're dependent on that, so too are we. We need to find other strands, other sectors to build up. You know, technology would be ideal and we've made some great marks in that, bioscience, fantastic, but not houses. &nbsp;
Let's not look at an unproductive sector of the economy to provide us with wealth again. House prices have come back a little in the North Island, Auckland's average asking price is once again over a million dollars, and you should see the tat you get for that. That's up 9% from December. Tale of two islands: Christchurch, Queenstown, Otago, Southland, all seen significant increases in prices. But the “drop in value” has seen a drop in confidence. Reserve Bank's Paul Conway says the reduced prominence of the wealth effect from higher house prices is a risk to the economic recovery. It's a big change, he says, for the New Zealand economy to not have that increase in house prices as a kicker to aggregate demand. He says there may well have been structural changes in the housing market that means an increase in demand for housing no longer equates with higher house prices. &nbsp;
And it's true, for a couple of decades Kiwi property owners have been living off the wealth of their main asset. There were astronomical rises in the value of homes around the country and people felt wealthy and spent like they were wealthy. A chronic undersupply of homes, high migration, low interest rates saw huge rises in the value of homes around the country and so people spent like they were rich. All of a sudden, a home became far more than a place you lived in, it was an asset with equity which you could use to springboard yourself into wealth, as so many of the ads that we ran on this station told you. People spent like drunken sailors and the economy boomed. Fast track to the post Covid slump and people have seen their house prices drop – in some horrible cases they owe more on their house than they can sell it for. And as Paul Conway says, there may well have been structural changes to the housing market. High prices for the essentials means there's less disposable income in households and if one of you has been made redundant, it has been a tough few years. We've lost our groove. But as Reserve Bank Governor Dr. Anne Bremen told Mike Hosking this morning, there's enormous potential in the New Zealand economy and there are reasons to be optimistic.&nbsp;
“I think it's a great economy. I think New Zealanders are underestimating actually the potential going forward in the New Zealand economy. We're already seeing some sectors doing really well, agriculture, manufacturing is starting going, and I do expect this to broaden in this year. So I'm very positive. We actually think there's quite a lot of what we call spare capacity in the economy, so we think that the economy can grow at a higher pace without causing so much inflationary pressure because there is still high unemployment, firms can increase, you know, manufacturing without having, they're starting to invest actually, which is also really good to see. So we do think there is spare capacity. And I know people, there is a lot of good potential in this economy. People should be a bit more optimistic.”&nbsp;
There you go. So many people are telling us to be optimistic. We must be optimistic. We're all going to be optimistic, we're going to stay after class until we're all optimistic. Okay, I mean, a little bit hard when you've got the, you know, the infrastructure plan coming out yesterday which said that pretty much we need so much and we can't afford it. But there is room to grow in the economy as Dr. Bremen said, and as people know. But if you're not feeling it, you're not going to be spending. &nbsp;
Back in the day when we were using our houses as ATMs, I mean I was one of them, we bought a house in Grey Lynn because it was the only place we could afford. I think it was about $250,000 —might have been closer to $300,000— which seemed a fortune at the time, but then the house price just went up and up and up so you could afford to do the renos. We could take it from an uninsulated place where the floorboards were open to the bare dirt floor underneath, as it had been since 1890. You could do the renos, you could do the landscaping of the garden, you were spending and New Zealand businesses were the ones who benefited from that. &nbsp;
So if you're not doing that, where are the sustainable businesses going to get their work? If people don't feel confident enough about improving their homes or, you know, using the money that they've built up in their homes, how do you replace that quite significant chunk of money go round? Do you feel confident? Do you feel optimistic? Can you see light at the end of the tunnel?&nbsp;

Kerre Woodham: Can you see the light at the end of the tunnel?

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/3ff5cdb5-4d20-4d76-8676-b3f5018055c1/transcript

John Tookey: AUT Professor of Construction on the Government's plan to tackle construction costs

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