Building Industry trends report published

The Department has published the third quarterly report summarising building industry trends and performance to 30 September 2004.

Aims

The report:

• examines key building industry trends and performance issues
• helps the Department fulfil its performance-monitoring role, as defined by the Building Act 2004
• allows information to be shared with industry stakeholders, increasing understanding of current problems within building control while highlighting performance gains.

General trends

The building boom of recent years slowed during the September 2004 quarter. Led by a decline in the number of consents issued in Auckland, there has been a decrease in consents for new dwellings, including a sharp reduction in those issued for new apartments. While the overall number of dwelling consents remains high, fundamental indicators suggest that demand for new residential buildings is past its peak.

The impact on the building sector of a drop in residential demand is expected to be relatively limited. Commercial building activity is on the rise and overall levels of non-residential construction look to increase significantly over the next several years.

Building costs also continue to climb, driven by the increased expense of both labour and materials.

Building quality

The building industry has confronted systemic performance problems over the past few years. The quality of building outcomes appears to be improving, with an increased awareness of the poor building practices that can result in failures.

There is, however, potentially a long tail to the weathertightness issue. Currently, the bulk of problems are in buildings given consents from 1993 to 1999. Given the industry’s relatively recent response to weathertightness problems, building work done from 2000 to 2003 may also be affected.

A number of investigations have been completed into concerns that were raised in early 2003 about a broad range of potential design and construction deficiencies in high-rise buildings.

This includes research into the performance of pre-cast concrete floors, slender walls, and the use of cold-worked steel. Other building performance issues addressed include apartment design (including fire safety) and accessibility. These have been dealt with through Building Code changes, determinations, and other work with industry stakeholders.

Building regulation 

Territorial authorities and building certifiers have been responding to an increased expectation to maintain quality standards. That focus is now shifting toward actively qualifying as building consent authorities (BCAs). BCA accreditation is a measure brought in by the Building Act 2004 to improve consistency in local authority building control. The accreditation requirements will ensure improved industry performance on issues such as access provisions, weathertightness, producer statement regimes, and the assessment of alternative solutions.

During the September quarter, a review of the certifier insurance scheme highlighted several problems. Changes have now been proposed to insurance requirements as a result of this review. With the upcoming requirements for BCA accreditation, several private building certifiers have decided to close their businesses and others are negotiating new contracting arrangements with TAs. One certifier has also closed following disciplinary action taken against it.

These changes in the private building certifier industry are being actively managed by the Department to ensure consumer and industry transition issues are resolved.