Chielder.

Chielder.

I'm Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. We've all got an anecdote or story about a trade who did us dirty or an issue with a new build.

I'm Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. We've all got an anecdote or story about a trade who did us dirty or an issue with a new build.

Well, now we've got some actual.

Well, now we've got some actual.

Evidence around what's happening in the construction industry. The Building Research Association of New Zealand has launched a new Build Insights tool to provide accurate information on everything from trading callbacks to new apprenticeships and the cost of new builds. Later, we'll be joined by Brand's senior economist Matt Curtis to talk through the broader economic picture. But first on the Front Page ends At Herald, Head of Data Chris Knox is with us to run through some of the key stats when it comes to tradees. Chris, let's start with the one thing everyone wants, the answer to which trady do people call back the most to fix an issue after they've moved in.

Evidence around what's happening in the construction industry. The Building Research Association of New Zealand has launched a new Build Insights tool to provide accurate information on everything from trading callbacks to new apprenticeships and the cost of new builds. Later, we'll be joined by Brand's senior economist Matt Curtis to talk through the broader economic picture. But first on the Front Page ends At Herald, Head of Data Chris Knox is with us to run through some of the key stats when it comes to tradees. Chris, let's start with the one thing everyone wants, the answer to which trady do people call back the most to fix an issue after they've moved in.

It turns out it's painters. Fifty percent of people of new homeowners report that painters need to come back after they've moved in.

It turns out it's painters. Fifty percent of people of new homeowners report that painters need to come back after they've moved in.

And why is that they've just done a shoddy job or.

And why is that they've just done a shoddy job or.

Well, I'm not sure. This is not something I'm not certain about. It could also be that they are impacted by other people's work more so, like the painter might do stuff and then you know, the electrician comes in and cuts a new hole, and then the painter needs to come back.

Well, I'm not sure. This is not something I'm not certain about. It could also be that they are impacted by other people's work more so, like the painter might do stuff and then you know, the electrician comes in and cuts a new hole, and then the painter needs to come back.

Oh right, right.

Oh right, right.

But on top of that, a growing number of people are unhappy with their builders as well.

But on top of that, a growing number of people are unhappy with their builders as well.

Hey, yeah, I was.

Hey, yeah, I was.

Quite surprised at the level of unhappiness with a builder, particularly for a new build, where you know, I feel like things should be a bit more I guess defined or controlled than they are in a renovation. But yeah, it looks like basically one in three people wouldn't recommend their builder after they've completed a new build.

Quite surprised at the level of unhappiness with a builder, particularly for a new build, where you know, I feel like things should be a bit more I guess defined or controlled than they are in a renovation. But yeah, it looks like basically one in three people wouldn't recommend their builder after they've completed a new build.

That's pretty concerning considering how many people are looking to do building on their house, not even just a new build, but just renoing the kitchen and stuff as well.

That's pretty concerning considering how many people are looking to do building on their house, not even just a new build, but just renoing the kitchen and stuff as well.

Hey, yeah, it's certainly.

Hey, yeah, it's certainly.

I mean, I guess they were restricted by there's not a lot of not always a lot of choice about which builder you go to, But certainly, I think the thing that sort of struck me from this data is how much kind of more work I'd put into trying to make sure that I was happy with my builder before I got started.

I mean, I guess they were restricted by there's not a lot of not always a lot of choice about which builder you go to, But certainly, I think the thing that sort of struck me from this data is how much kind of more work I'd put into trying to make sure that I was happy with my builder before I got started.

There does seem to generally be some rising dissatisfaction with new builds as well.

There does seem to generally be some rising dissatisfaction with new builds as well.

Hey, yes, yeah, I again, I'm not sure kind of what's driving this trend, but people don't seem to be super happy after they've moved in, which you know, it would be pretty gunning to put all that time and money into a house and then not like it.

Hey, yes, yeah, I again, I'm not sure kind of what's driving this trend, but people don't seem to be super happy after they've moved in, which you know, it would be pretty gunning to put all that time and money into a house and then not like it.

What's some of the data around that seems like a really big thing is the level of communication between the client and the builder.

What's some of the data around that seems like a really big thing is the level of communication between the client and the builder.

So six only sixty two percent of people are actually happy with the level of communication that they've had now, which has dropped from kind of a peak of seventy five about five years ago. And there's also people are unhappy with completion time.

So six only sixty two percent of people are actually happy with the level of communication that they've had now, which has dropped from kind of a peak of seventy five about five years ago. And there's also people are unhappy with completion time.

There is some positive news around the price of houses and buying land though.

There is some positive news around the price of houses and buying land though.

So it's not all bad news, is it.

So it's not all bad news, is it.

No, there's been a decrease in the cost of land. In fact, brains reckons it's about the lowest it's been in about three years, and the cost of land plus a new build is about four percent down on what it was, although on average about two hundred thousand dollars more than buying an already existing house.

No, there's been a decrease in the cost of land. In fact, brains reckons it's about the lowest it's been in about three years, and the cost of land plus a new build is about four percent down on what it was, although on average about two hundred thousand dollars more than buying an already existing house.

It's all very well government saying that they're going to pop their finger on the scale and dictate terms to how expensive a house is going to be. But the reality is, as soon as they declare that they're going to develop in a particular area, land values go up and therefore costs go up. The market is what the market is. It costs a particular amount of money to be able to deliver a house or particular size and particular location. That is the fact. You can't have it both ways.

It's all very well government saying that they're going to pop their finger on the scale and dictate terms to how expensive a house is going to be. But the reality is, as soon as they declare that they're going to develop in a particular area, land values go up and therefore costs go up. The market is what the market is. It costs a particular amount of money to be able to deliver a house or particular size and particular location. That is the fact. You can't have it both ways.

And for those people who aren't happy with their builders, I suppose it's good news that there's more of them joining the industry.

And for those people who aren't happy with their builders, I suppose it's good news that there's more of them joining the industry.

Yeah, there's been a really big search in the number of people doing apprenticeships and other training related to trades. It's nearly doubled in ten years, which I thought was quite surprising.

Yeah, there's been a really big search in the number of people doing apprenticeships and other training related to trades. It's nearly doubled in ten years, which I thought was quite surprising.

Yeah, considering how.

Yeah, considering how.

Difficult it is to get someone out to your house, especially on a weekend, I don't know if you lock your key in, for example.

Difficult it is to get someone out to your house, especially on a weekend, I don't know if you lock your key in, for example.

This sounds like it might not be hypothetical. I guess another thing that maybe could be something we should be looking at in the future is how many people are training in new Zealand and then going and working overseas. Potentially the construction detector might suffer from some of the same dynamics that our other training sectors do.

This sounds like it might not be hypothetical. I guess another thing that maybe could be something we should be looking at in the future is how many people are training in new Zealand and then going and working overseas. Potentially the construction detector might suffer from some of the same dynamics that our other training sectors do.

Yeah, so we spend all of the time training you know, plaster up here and then they go to Aussie and get paid double.

Yeah, so we spend all of the time training you know, plaster up here and then they go to Aussie and get paid double.

That's that same old story.

That's that same old story.

I suspect that could be in play.

I suspect that could be in play.

Yes, is there any other data that stood out to you, Chris?

Yes, is there any other data that stood out to you, Chris?

I was actually quite surprised by the variation and how long it takes to get a consent done. So you've got some councils that are getting have a medium processing time of five days, which is essentially just a week, and then other councils it's more like three weeks. And then obviously it's a median, so there's a whole lot more that are much higher than that.

I was actually quite surprised by the variation and how long it takes to get a consent done. So you've got some councils that are getting have a medium processing time of five days, which is essentially just a week, and then other councils it's more like three weeks. And then obviously it's a median, so there's a whole lot more that are much higher than that.

Yeah, where's the worst place?

Yeah, where's the worst place?

The worst place is whay Kado District Council, although Auckland Council is the worst of kind of the large councils and Carterendon is the place to where things happen really quickly.

The worst place is whay Kado District Council, although Auckland Council is the worst of kind of the large councils and Carterendon is the place to where things happen really quickly.

Should there be some kind of regulatory framework that covers the entire country or do we just leave it up to the councils individually to sign off on these things.

Should there be some kind of regulatory framework that covers the entire country or do we just leave it up to the councils individually to sign off on these things.

I mean, this is a, I guess, a politically charged question, but I do my personal opinions. Sixty six different organizations doing building consensus too many for a country of five million.

I mean, this is a, I guess, a politically charged question, but I do my personal opinions. Sixty six different organizations doing building consensus too many for a country of five million.

Thanks for joining us, Chris Norris, you are.

Thanks for joining us, Chris Norris, you are.

For a deeper insight into the new build Insights tool and what it means for the wider economy. We're joined now by Brand's senior economist Matt Curtis, So Matt, can you give us some insight into why this tool was created in the first place.

For a deeper insight into the new build Insights tool and what it means for the wider economy. We're joined now by Brand's senior economist Matt Curtis, So Matt, can you give us some insight into why this tool was created in the first place.

There's a lot of building related data out there that's all quite disparate and it doesn't really talk to each other. So what we thought was a good idea was to really try and bring it all together in one source for people to quickly reference and understand what's going on at quite a high level. But it does bring together a whole bunch of data from various sources that can really show people at a high level what's going on across the building and construction system.

There's a lot of building related data out there that's all quite disparate and it doesn't really talk to each other. So what we thought was a good idea was to really try and bring it all together in one source for people to quickly reference and understand what's going on at quite a high level. But it does bring together a whole bunch of data from various sources that can really show people at a high level what's going on across the building and construction system.

Is there a bit of a move to limit anecdotes and word of mouth spreading that could give people the wrong idea of where the industry is at.

Is there a bit of a move to limit anecdotes and word of mouth spreading that could give people the wrong idea of where the industry is at.

I think it's more about just providing that single source of truth from a trusted and reputal source where we can stop talking about what might be happening out there and focus on what the data's actually telling us is going.

I think it's more about just providing that single source of truth from a trusted and reputal source where we can stop talking about what might be happening out there and focus on what the data's actually telling us is going.

On on the ground.

On on the ground.

Right, So, looking into the data, new builds continue to be expensive, what are the factors driving those costs?

Right, So, looking into the data, new builds continue to be expensive, what are the factors driving those costs?

A lot of the factors relate to how sticky some of the pricing can be sections. For example, the purchasing of land often has a long lag time between when it's purchased and when it's finally brought to market, which does mean that sections can't necessarily respond to the drivers of the day. Then we've got factors such as labor, where labor quite short supply. When demand for construction was so high, it's really hard to then scale down label pricing when things start to slow down. And then materials, we had some supply chain issues, a lot of demand for these building products and they went up at the same time. It was almost a perfect storm there for a little while during that sort of pandemic.

A lot of the factors relate to how sticky some of the pricing can be sections. For example, the purchasing of land often has a long lag time between when it's purchased and when it's finally brought to market, which does mean that sections can't necessarily respond to the drivers of the day. Then we've got factors such as labor, where labor quite short supply. When demand for construction was so high, it's really hard to then scale down label pricing when things start to slow down. And then materials, we had some supply chain issues, a lot of demand for these building products and they went up at the same time. It was almost a perfect storm there for a little while during that sort of pandemic.

Are we seeing any improvement here, because we've been talking about this since COVID so is there any light at the end of the tunnel.

Are we seeing any improvement here, because we've been talking about this since COVID so is there any light at the end of the tunnel.

Yes, So we're starting to see land prices respond to the fact that we're just not building to the same extent as we were. Some of the medium density stuff. We can build that at a cheaper price per unit, then we can standalone, so that brings some efficiencies as well, and materials are starting to slowly come back down. It is a global market, and what we're seeing is that demand internationally is starting to slow and therefore we're seeing some of the price implications of that slow down flow through to New Zealand.

Yes, So we're starting to see land prices respond to the fact that we're just not building to the same extent as we were. Some of the medium density stuff. We can build that at a cheaper price per unit, then we can standalone, so that brings some efficiencies as well, and materials are starting to slowly come back down. It is a global market, and what we're seeing is that demand internationally is starting to slow and therefore we're seeing some of the price implications of that slow down flow through to New Zealand.

So the construction industry is growing according to this data eighty one one thousand, eight hundred and ninety one businesses in twenty twenty four, but construction business liquidations were up thirty seven percent as well and made up thirty one percent of all business liquidations. What's fueling this boom and I suppose bust At the same time.

So the construction industry is growing according to this data eighty one one thousand, eight hundred and ninety one businesses in twenty twenty four, but construction business liquidations were up thirty seven percent as well and made up thirty one percent of all business liquidations. What's fueling this boom and I suppose bust At the same time.

It was a difficult time for the construction industry as we sort of came out of the COVID pandemic. We saw a lot of pricing that was put in pre pandemic or pre supply chain issues that then was really hard to meet when those price increases came through the system, So there was a little bit of time at it top of the industry to respond to those issues, and that did pot some construction businesses in a hard spot. What we're seeing now is that there's a bit more pricing certainty in the system, able to better design and build at the price points that they need to clear these houses and buildings more generally, So we're starting to see a system that's kind of starting to reset, rebalance, come into the norm I think, and.

It was a difficult time for the construction industry as we sort of came out of the COVID pandemic. We saw a lot of pricing that was put in pre pandemic or pre supply chain issues that then was really hard to meet when those price increases came through the system, So there was a little bit of time at it top of the industry to respond to those issues, and that did pot some construction businesses in a hard spot. What we're seeing now is that there's a bit more pricing certainty in the system, able to better design and build at the price points that they need to clear these houses and buildings more generally, So we're starting to see a system that's kind of starting to reset, rebalance, come into the norm I think, and.

I guess there's a tendency for construction workers to be more self employed. Hey, can that be difficult to maintain?

I guess there's a tendency for construction workers to be more self employed. Hey, can that be difficult to maintain?

It can be difficult to maintain profit margins when it really depends on how much work you've got going on. So a building system or workloads that can be quite variable can impact someone who's a solved proprietor you know, they work by themselves a lot more than a large construction firm, so it will be less resilient to those fluctuations in the short term.

It can be difficult to maintain profit margins when it really depends on how much work you've got going on. So a building system or workloads that can be quite variable can impact someone who's a solved proprietor you know, they work by themselves a lot more than a large construction firm, so it will be less resilient to those fluctuations in the short term.

There's also data in this tool around trading callbacks and how often roofers or painters are getting us to come back and touch something up. What do you hope people do with this information.

There's also data in this tool around trading callbacks and how often roofers or painters are getting us to come back and touch something up. What do you hope people do with this information.

I just think it's a really good way for the industry to start measuring what they're doing, understand the size of the problem, and then think about ways that they can improve it. I think it's important with some of the defect stuff to kind of contextualize it as well. A building is a very complex system of moving parts are going and doing work sequenced, but you're relying on someone who comes in before you to do a good job to then come and do your piece. Sometimes secuencing doesn't work. Sometimes something can come up after you have completed your work that means that you have to come back. So of our classic example here being painters coming to do touch ups because someone might have dinged the wall when they were moving something in or something like that. So there are numerous factors that can actually lead to defects on a building site, not just the quality of workmanship from one trade to the next.

I just think it's a really good way for the industry to start measuring what they're doing, understand the size of the problem, and then think about ways that they can improve it. I think it's important with some of the defect stuff to kind of contextualize it as well. A building is a very complex system of moving parts are going and doing work sequenced, but you're relying on someone who comes in before you to do a good job to then come and do your piece. Sometimes secuencing doesn't work. Sometimes something can come up after you have completed your work that means that you have to come back. So of our classic example here being painters coming to do touch ups because someone might have dinged the wall when they were moving something in or something like that. So there are numerous factors that can actually lead to defects on a building site, not just the quality of workmanship from one trade to the next.

Well that's what I was going to say. Hey, so it's not always someone doing shoddy work or something like that, but it does matter what the person does before you.

Well that's what I was going to say. Hey, so it's not always someone doing shoddy work or something like that, but it does matter what the person does before you.

Exactly, and as a system, it's good to recognize that we all play a part towards a good quality outcome at the end of the day, So tracking it as a system is important, but also having those processes and procedures in place on site that someone can take hold of quality and be responsible for it. It's really important.

Exactly, and as a system, it's good to recognize that we all play a part towards a good quality outcome at the end of the day, So tracking it as a system is important, but also having those processes and procedures in place on site that someone can take hold of quality and be responsible for it. It's really important.

Well, do you think that we've lost that kind of quality control aspect of building.

Well, do you think that we've lost that kind of quality control aspect of building.

Not necessarily, it's just not something that's being done in a conscious or considered way. Often you do need someone who's ultimately responsible for delivering to that client, and sometimes that can be lost when we do ramp up there's a lot of activity going on. It can be difficult to keep control of site to site rather than looking at you everything that you're trying to build.

Not necessarily, it's just not something that's being done in a conscious or considered way. Often you do need someone who's ultimately responsible for delivering to that client, and sometimes that can be lost when we do ramp up there's a lot of activity going on. It can be difficult to keep control of site to site rather than looking at you everything that you're trying to build.

At the same time, there are some signs of more apprentices coming into the industry, which is obviously a good thing. But when you look at some of the data on callbacks and growing dissatisfaction and businesses going under, do you think we need to look a little bit more at the standards or regulations or even training.

At the same time, there are some signs of more apprentices coming into the industry, which is obviously a good thing. But when you look at some of the data on callbacks and growing dissatisfaction and businesses going under, do you think we need to look a little bit more at the standards or regulations or even training.

Again, it's not necessarily the case. I think it's important that we have a strong influx of a prince's coming in, particularly when we're sort of aware of what could be coming out of the industry over the next few years. We do know that we have an aging workforce, so it's important to keep furnishing the staff so we've still got the capability to deliver on everything that needs to be built. It's just making sure that we're pairing our apprentices with good experienced builders or trades so that they're able to learn on the job to a satisfactory level.

Again, it's not necessarily the case. I think it's important that we have a strong influx of a prince's coming in, particularly when we're sort of aware of what could be coming out of the industry over the next few years. We do know that we have an aging workforce, so it's important to keep furnishing the staff so we've still got the capability to deliver on everything that needs to be built. It's just making sure that we're pairing our apprentices with good experienced builders or trades so that they're able to learn on the job to a satisfactory level.

And I guess from an economic perspective, it's not great for us as a nation if we are spending a lot more time and money on getting our houses fixed up. The obvious example is the leaky building crisis, but more recently we reported earlier this year on new builds in Auckland overheating over summer just because of the way that they're made.

And I guess from an economic perspective, it's not great for us as a nation if we are spending a lot more time and money on getting our houses fixed up. The obvious example is the leaky building crisis, but more recently we reported earlier this year on new builds in Auckland overheating over summer just because of the way that they're made.

The fundamental cause of the issue is the lack of requirement to consider overheating in the building code and how that comes to reality is a lot of overglazing. We focused a lot on the view and getting daylight into homes and that is a good thing, but we tend to overglaze a lot of our houses and we don't have adequate shady.

The fundamental cause of the issue is the lack of requirement to consider overheating in the building code and how that comes to reality is a lot of overglazing. We focused a lot on the view and getting daylight into homes and that is a good thing, but we tend to overglaze a lot of our houses and we don't have adequate shady.

And from I guess an even more micro level, My producer had to work from home, for example, for a couple of days last week because he needed to get his curtain rail fixed and it actually took four visits in total for the plastering and painting to be completed. He then had to work from home, and that affects productivity down the line.

And from I guess an even more micro level, My producer had to work from home, for example, for a couple of days last week because he needed to get his curtain rail fixed and it actually took four visits in total for the plastering and painting to be completed. He then had to work from home, and that affects productivity down the line.

Hey, exactly, there are numerous flow on effects two things not being done right first time.

Hey, exactly, there are numerous flow on effects two things not being done right first time.

From the data that you've collected and in creating this, what's something that stood out to you that may have surprised you, shocked you good or bad?

From the data that you've collected and in creating this, what's something that stood out to you that may have surprised you, shocked you good or bad?

I think that's something that I always find quite surprising about this is just that difference between the cost of buying existing home versus building something new, something that we often think of as being a trade off in the system, but that we're finding that actually that cost of frencher can be upwards of two hundred thousand dollars at a time. We're housing affordability is a real issue in New Zealand, really trying to start light on how hardened is going to be fixed some of these problems going forward. We can't necessarily just build our way out of their housing affordability issue.

I think that's something that I always find quite surprising about this is just that difference between the cost of buying existing home versus building something new, something that we often think of as being a trade off in the system, but that we're finding that actually that cost of frencher can be upwards of two hundred thousand dollars at a time. We're housing affordability is a real issue in New Zealand, really trying to start light on how hardened is going to be fixed some of these problems going forward. We can't necessarily just build our way out of their housing affordability issue.

And do you think it's quite important because we obviously need more houses.

And do you think it's quite important because we obviously need more houses.

We've been told that for it feels like decades now that we need to keep building houses.

We've been told that for it feels like decades now that we need to keep building houses.

We need houses, houses, houses.

We need houses, houses, houses.

But is there a fear that if you try to go as quickly as possible then you end up with shoddy work.

But is there a fear that if you try to go as quickly as possible then you end up with shoddy work.

It's about right sizing. I think for me, it's more of an issue when you have these large swings and activity rather than the share amount of houses that we need to build. If we can consistently deliver a pipeline of say forty thousand new houses a year, the industry is skilled and has capability and capacity to do so. What we can't do is suddenly decide that we need to build fifty thousand houses then come down to thirty. That's where you start to lose those skills or that ability to get through the sharer number of houses that we need to and that's when workmanship issues can start to show up.

It's about right sizing. I think for me, it's more of an issue when you have these large swings and activity rather than the share amount of houses that we need to build. If we can consistently deliver a pipeline of say forty thousand new houses a year, the industry is skilled and has capability and capacity to do so. What we can't do is suddenly decide that we need to build fifty thousand houses then come down to thirty. That's where you start to lose those skills or that ability to get through the sharer number of houses that we need to and that's when workmanship issues can start to show up.

Thanks for joining us, Matt, Thank you for having me.

Thanks for joining us, Matt, Thank you for having me.

That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at enzdherld dot co dot nz. The Front Page is produced by Ethan Sills and Richard Martin, who is also our sound engineer. I'm Chelsea Daniels. Subscribe to the front page on iHeartRadio or wherever you get your podcasts, and tune in tomorrow for another look behind the headlines.

That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at enzdherld dot co dot nz. The Front Page is produced by Ethan Sills and Richard Martin, who is also our sound engineer. I'm Chelsea Daniels. Subscribe to the front page on iHeartRadio or wherever you get your podcasts, and tune in tomorrow for another look behind the headlines.