New research on innovation in residential construction
30 October 2014
New research released on innovation in residential construction
A report by the New Zealand Institute of Economic Research (NZIER) on the impact of the demand for individually tailored (bespoke) houses on innovation in the residential construction sector was released today.
The study was commissioned by the Building Research Association of New Zealand (BRANZ) and the Building and Construction Productivity Partnership (Productivity Partnership), which is part of the Ministry of Business, Innovation and Employment. Both organisations take an active interest in how to improve the performance of our construction industry.
This new research by NZIER throws light on how we might increase innovation and productivity in residential building in New Zealand. It indicates that better project management and changing the way building regulations are set and applied provide the greatest opportunities for improvement.
NZIER found that innovation in residential construction here is focused on the use of new products that enhance building design but don’t necessarily improve sector productivity.
“The findings confirm New Zealanders’ love affair with bespoke houses that are designed to meet their individual needs,” said Productivity Partnership Manager Chris Kane. “None of the buyers interviewed for the study built a house off standard plans.
“NZIER’s report shows that both builders and buyers are open to more standardised construction methods, but consumer demand for quality features such as designer kitchens will continue to drive demand for tailoring,” he said. “Greater use of innovative building techniques, such as prefabrication, is one way residential builders can help meet the upswing in construction demand we are experiencing while providing quality, affordable housing.”
See the NZIER report “Bespoke residential housing demand and construction innovation” at http://buildingvalue.co.nz/sites/default/files/Final-NZIER-Report-Bespoke-housing-and-innovation-in-residential-construction.pdf
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INFORMATION
NZIER was commissioned by BRANZ and
the Productivity Partnership within MBIE to
investigate:
1. the impact of bespoke housing
(individually tailored for customers); and
2. the
predominance of small construction firms (five or fewer
employees) on innovation and productivity in residential
construction.
Its report “Bespoke residential housing demand and construction innovation” examines the drivers of demand for bespoke housing and the barriers to innovation, and thus productivity, in residential construction in New Zealand. It is based on interviews with people who have commissioned new homes to be built, builders and other industry stakeholders.
Key findings
are:
• The drivers of demand for bespoke
housing and barriers to innovation are
complex.
• Innovation in residential construction is
focused on the use of new products that enhance building
design but don’t necessarily improve sector
productivity.
• The average size of New Zealand
construction firms (five or fewer employees) is larger than
statistics suggest because they have a high number of
contractors who are treated as staff – making their
“shadow size” significantly bigger.
• Firms network
widely with other trades and suppliers which assists the
spread of innovation.
• Residential builders are open
to innovation but identify regulation and avoidance of
liability as barriers to greater innovation and productivity
gains.
• Buyers are comfortable with increased use of
standardised construction, such as prefabrication of
components, as long as they can still tailor the design to
meet their needs.
• Poor project management
significantly extends building times and could be due to a
combination of customers not demanding it or being willing
to pay for it, a lack of project management skills, and slow
industry uptake of technology (to assist sharing or project
plans and information, etc).
Recommendations
include:
• Better consumer information and
promotion of existing websites, particularly for households
needing to build a replacement home in
Canterbury.
• Capturing statistics on build times and
making them public (as happens in Australia) to encourage
demand for quicker build times and better project
management.
• Better industry training in project
management, ideally with tools and technology that can be
used across the industry.
• Making it easier to import
new products that have “proven performance” in
international markets.
• Ensuring the benefits of
changes to regulations outweigh the costs.
Most of the report’s recommendations are already being implemented.
ENDS