The National-led coalition government recently made a dramatic announcement: it plans to advance a series of major housing policy reforms before June this year. Observers have described this as a demonstration of Christopher Luxon's leadership since becoming Prime Minister, as he begins setting the next quarterly action plan for his new government.
New Zealand Prime Minister Christopher Luxon recently unveiled his next quarterly government action plan
Of the 36 actions due to begin over the coming quarter, four are closely linked to the property industry. The government will focus on substantial reforms to medium- and high-density zoning rules, public housing regulations, tenancy regulations and the building materials market.
At midday on 4 April, the government announced its building materials reform plans, which will make it easier for builders to use overseas building products.
The government says it will ease restrictions on the use of building materials in New Zealand. Building and Construction Minister Chris Penk said in a recent speech that the cost of introducing new building products to the local market is currently too high. 'We will remove barriers preventing quality overseas building products from entering the New Zealand market, without compromising quality.'
National proposed easing these restrictions after supply disruptions during the COVID pandemic caused prices for certain products to soar. The party proposed automatically approving in New Zealand any material or system approved for use in the United States, European, United Kingdom and Australian construction markets.
Building and Construction Minister Chris Penk with Prime Minister Christopher Luxon
Today, Building and Construction Minister Chris Penk announced a new government plan to open up the building materials market, making overseas building products easier and cheaper for builders to use. He said that 'building a standalone house in New Zealand currently costs 50% more than in Australia'.
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The newly announced reforms include:
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Penk said the coalition government hoped to pass legislation enabling the change before the end of 2024.
Penk explained that Australian building products were only a starting point, and the government would also consider products from countries with strong engineering reputations. At the same time, 'building consent authorities must assess construction projects as a whole. For example, they must consider not only whether products are durable and of high quality, but also whether they are being used appropriately.'
Prime Minister Christopher Luxon looked towards North America, saying: 'Other countries around the world are also building excellent homes, with standards comparable to or even higher than New Zealand's.' He believes New Zealand should not be afraid to import these international products. He suggested New Zealand could even move away from using local authorities as building consent authorities, noting that overseas countries have far fewer such bodies, sometimes just one for an entire country.
Penk said New Zealand's housebuilding costs had risen 41% since 2019. The reform would represent a major adjustment for the construction industry, lowering costs without compromising quality and making homes easier and more affordable to build or renovate. It would also improve New Zealand's resilience to supply chain disruptions, spare New Zealand businesses the complexity of seeking alternative domestic approval pathways, and reduce barriers to exporting their products.
Alongside building materials reform, Cabinet will also agree to allow local authorities to implement the Medium Density Residential Standards (MDRS) and make important decisions on the Going for Housing Growth programme. In a briefing to supporters, ACT claimed credit for this policy and 17 other action points, describing the policy as the 'three-storey housing bill'.
On this issue, ACT stood against the rest of Parliament. The party argued that Parliament's mandatory zoning would not deliver more new homes but would place further strain on council infrastructure, and that MDRS should therefore be optional. The coalition agreement between the two parties went further, requiring any council wishing to retain MDRS to vote to approve its continued implementation.
Housing Minister Chris Bishop said in a Cabinet paper that he intended to report back in the 'first quarter of 2024' on how to make these rules workable and on the details. This would be the first step in a three-year plan to boost housebuilding, requiring local authorities to zone enough land for 30 years of development.
But what does this mean in practice? The policy's feasibility is still being studied. Some experts say many councils have already nominally zoned enough land for 30 years of development, yet housing affordability continues to deteriorate as costs rise.
Bishop said the reform was crucial and that details would be announced before the May Budget. Other measures to improve housing affordability include a fast-track building consent system that could give major developments the green light,
The next action on the list is a formal response to former Prime Minister Bill English's ongoing independent review of Kāinga Ora. The review is expected to report in March, covering the agency's financial viability and its costs relative to the private sector. Bishop stressed that he was 'deeply concerned' about the NZ$520,000,000 operating deficit, which was undermining the public agency's prospects of achieving an operating surplus. The report is likely to endorse opening public housing construction projects to community and private providers.
Labour housing spokesperson Kieran McAnulty publicly criticised the government
Last Tuesday, Labour housing spokesperson Kieran McAnulty publicly expressed dissatisfaction with the current government, accusing the coalition of refusing to commit funding for urgently needed social housing. He said the government had 'made many promises on housing, but ultimately made things worse'. Community housing providers are pausing new public housing developments because the government will not commit to funding income-related rent subsidies beyond June 2025. For example, the Salvation Army (Salvation Army) had 70 urgently needed homes cancelled by the Ministry of Housing and Urban Development.
McAnulty also said uncertainty was jeopardising the entire social housing construction programme. Kāinga Ora projects had been cancelled, community housing providers were pulling back, and building consent applications were falling rapidly. This affected families urgently needing homes, as well as local workers and apprentices losing their jobs as a result.
The seventh item on the action plan is another ACT policy relating to rental housing. It is described as 'introducing legislation to improve the rental market', but could also be characterised as easing regulations to give tenants more rights.
ACT said in its briefing that this would mean restoring no-cause evictions, shortening notice periods for ending fixed-term tenancies, and allowing landlords to charge larger bonds to tenants with pets. Landlords would benefit from these more relaxed rules, which would encourage more owners to rent out their properties while requiring tenants to bear more risk.
Green Party co-leader Chloe Swarbrick questioned 'for whom' the legislation would improve the rental market, suggesting it certainly would not be tenants.