Building Consents
It was reported yesterday there has been 21,032 houses consented in the year to end of January the largest drop in 12 years. The slowdown in building consents means a reduction in demand for construction services. Smaller construction companies will be vulnerable to the slowdown, with likely job losses which creates a ripple effect on the wider economy.
The biggest bug bear I hear is the length of time it takes to get building consents. Why should this matter in a slowdown? If we can reduce the time involved in the building consent process, reducing approval times there is naturally a reduction in associated costs. This could encourage more building activity and reduce the negative impact of a slowdown. This could be one measure.
The government has recognized that the current building consent process can be slow, expensive, and complex. So what is it doing?
1. Introducing a national building consenting system:
a. June 2020, the Ministry of Business, Innovation and Employment (MBIE) secured funding to develop the new system, which aims to simplify and standardize the building consent process across the country.
b. March and July 2021, included interviews, surveys and site visits with Building Consent Authorities (BCAs) and sector professionals (builders, engineers, architects and designers).
c. July 2022, MBIE released an issues discussion document for public consultation along with a policy position statement on risk and liability. Submissions closed September 2022.
d. December 2022 – issue discussion document released
e. 2023 next steps to be published
The new system was planned to be operational by 2024.
We are now three years into the change process and if its like the Puhoi to Warkworth motorway will be delayed.
A massive drop, would also be interesting to see how many of the consents issued in 2022 might not be being built now. The flood damage might underwrite some of the activity, but NZ has to stop relying on natural disasters as a way of proping up the economy.