Government responds to Commerce Commission’s market study into residential building supplies

The Commerce Commission’s Market study into residential building supplies report, released in December 2022, found that competition for the supply of key building supplies is not working as well as it could in the building and construction sector, and that improved competition would contribute to more safe, durable, healthy and affordable homes for New Zealanders.

To address its findings, the Commission made 9 recommendations aimed at improving competition. The Government has agreed, or agreed-in-principal, to 8 of the 9 recommendations and is supportive of the other recommendation to be addressed directly by the Commission.

As noted in the Commission’s report, the Government is already actively working to improve the building regulatory system and the way it operates, to improve competition.

The Government response to the market study identifies where current work programmes can provide effective vehicles to enact change and ultimately work to achieve the same outcomes outlined in the Commission’s report. Leveraging these existing work programmes will avoid duplication and help achieve these outcomes faster than starting new pieces of work.

The Ministry of Business, Innovation and Employment (MBIE) is also taking a number of practical steps to address the issues identified in the report, including the building consent system review, establishing the Critical Materials Taskforce, the Construction Sector Accord Transformation Plan 2022-2025, and broader Building System Reforms. MBIE has also already developed new guidance for building work that requires a consent and a standardised template for residential building consent applications.

The Cabinet paper will be proactively released in due course.

Read the Minister’s press release: Government taking action to improve building supply competition(external link) — Beehive.govt.nz

Read the Commerce Commission’s final report(external link) — Commerce Commission website