I have been recently considering the challenges that are facing the building industry today in New Zealand from a big picture point of view.

The cost of renting, buying, renovating, and building homes has risen considerably in the last year in New Zealand. I have seen this as an Architectural Designer on my clients’ projects and also as homeowner. And not one to point fingers at any one person or institution, I asked myself in the first instance what the driving forces behind this are.

A recent conversation with a Hamilton real estate agent pointed me towards one factor. While money is cheaper to borrow with interest rates as low as they are, the cost of renovating, building, or buying has risen. So lower interest rates come with a higher borrowing requirement as opposed to the higher interest rate we have seen in recent history with a lower borrowing requirement. For those in the market, this isn’t as much of a setback as for those trying to get into the market. This is a big barrier for first home buyers and first home builders.

Most of us are finding it harder to save. Kiwisaver is an indication of that growing trend. New Zealand wages generally have not kept pace with the rise in value and cost of our commodities and the cost of our living meaning going about getting into private ownership of homes isn’t as achievable as it was with the current mainstream method of achieving this, i.e. saving up a deposit to buy or build.

Also coupled with this, is the instantaneous consumerism that has become part of our culture. Our disposable income spend has increased and I daresay will continue to do so. The speed at which we can have almost anything we desire has hampered our consideration of what we actually desire vs what we perceive we should have. I remember my parents having old furniture passed down from my grandparents for years. This recent trend of having the latest and greatest has hit our wallet and our savings account.

A further issue, that Covid has accentuated is the supply of building materials and fixtures. Things we took for granted as being in abundance have now become harder and more expensive to get. Shortly after lockdown things such as lawnmowers sold here in New Zealand were hard to buy as supply become more problematic, particularly from international sources. We are now seeing this with plumbing fittings, tapware, and even door hardware. This is the challenge I am seeing in Architecture on the building on site. Delays in manufacturers in countries affected far more than New Zealand by Covid are creating knock-ons within our country. It has highlighted for me the astronomical reliance we have on overseas product production and shows the influence and expense of importation on building materials. Coupled with increased transportation costs, and compounded by quarantine requirements, the additional costs encored by suppliers and manufacturers are passed on through to the end consumer. The value we see a product as having now has other costs that affecting its price tag.

There is no one silver bullet solution, there is no one person to blame however maybe a change in perspective about how we go about things is needed to bring about change.

Whilst banks, governance, and legislation will prevail outside our sphere of influence, steps to reduce the amount being borrowed can help reduce the deposit, I know that's an obvious thing to say, but one that some people don’t act upon. This is hard for the buying market but reducing aspirations and therefore cost in a build can help bring costs into line. Planning for aspirations rather than achieving them all at once can be the way of achieving the dream but within a timeframe that works with our wallet.  

I believe we will also see a different way of people getting into the private housing ownership market. Far more collaboration, particularly amongst the millennials, a generation of out the box social thinking, will become more commonplace with buying, renovating, and building. Two families buying a home, parents, and children investing in a single property and social multi-use housing projects such as NightingGale in Melbourne are some ways that I believe will become more mainstream and commonplace. The trend to do it alone will no longer be the norm.

I think we need to relook at how we climb up the property ladder and start to see a build project or house as a work in progress. Planning for the future rather than building for the market will shift the motivation, aspirations, and actions that we plan for our homes. When we architecturally design our home for us, and consider our future changing needs, we design Smart Living Spaces. Rather than buying or building for now and then seeking a new solution elsewhere, means we build on our investment rather than build up. Seeing homeownership as a long-term project rather than an instantaneous solution creates an investment mindset rather than a consumerism mindset.

The cost of materials and their importation is something that again we can carefully consider. Choosing materials that are locally manufactured and produced can start to avoid the transportation costs that become an inherent part of a product's value. Supporting our own market over the use of an external one will strengthen not only our local economy but also our resilience as a country to face another pandemic. Coupled with NZ Made and Manufactured products, the acceptance of delays and the planning for them in our projects will go a long way in avoiding costs caused by delays or updating consents to accommodate alternatives. This is making the process smarter, not making it harder.

It’s not a one for all solution nor is it a case of only one solution for one project, however, a shift in mindset over what we can control and influence really is the only way to bring about solutions to the challenges that we currently face.

I would love to hear what challenges you see in our housing market or what challenges you are experiencing in your personal housing situation.

Words by Sharon Robinson. Architectural Design for Smart Living Spaces. Creating Architectural Design with People in Mind in Hamilton, Te Awamutu, Raglan, Cambridge and Waikato Surrounds


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Prefab NZ Member    Licenced Building Practitioner    New Zealand Green Building Council
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