New Zealand to Automatically Approve Overseas Building Materials to Reduce Construction Costs

Date Published: 5 April 2024

Key Facts

• A legislative change to the Building Act in New Zealand will allow the automatic approval of residential building materials approved in trusted overseas markets.
• This reform was announced by Building and Construction Minister Chris Penk, along with Prime Minister Christopher Luxon.
• This change comes as a response to high building costs and issues with supply chain disruptions like the recent GIB shortage.
• The approval process for new materials can currently take up to two years, hindering the entry of competitors in the market.
• The Government will amend the Building Act to respect the product standards of certain overseas jurisdictions and require consent authorities to accept these alternatives.
• This regulatory shift could lead to the addition of up to 200,000 products to New Zealand from Australia’s WaterMark certification scheme alone.
• The amendments are expected to be passed by the end of the year.
• These changes come in response to a Commerce Commission market study into residential building supplies requested by the previous Government, and they suggest making it easier to approve building supplies in New Zealand and allowing for more product substitutions on construction sites.
• These changes may also make it easier for New Zealand-made products to receive international approval as they will be benchmarked against approved overseas counterparts.

Article Summary

Under a major legislative overhaul in New Zealand, residential building materials permitted in trusted overseas markets will now achieve automatic approval. This regulatory change, announced by Building and Construction Minister Chris Penk and Prime Minister Christopher Luxon, is expected to address the rising building costs and supply chain disruptions experienced in the country.

Previously, the process for obtaining approval for new materials often took up to two years, creating a barrier for competition in the market. The amendment to the Building Act will now mean that the product standards of some jurisdictions will be recognised and their alternatives accepted by consent authorities. With this change, an influx of products—in potentially 200,000s—are expected to hit the New Zealand market, as is the case with Australia’s WaterMark certification scheme.

The changes are anticipated to be legislated by the end of the year. They were initiated in response to a Commerce Commission market study into residential building supplies, which had been requested by the preceding Government. The study had suggested making it easier to get building supplies approved in New Zealand and allowed for more product substitutions in construction sites.

Furthermore, the change in regulations could facilitate international approval for New Zealand-made products, as they will be compared against approved overseas alternatives. However, not all products may be suitable for local use due to different climate or seismic conditions existing in several overseas jurisdictions.

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