The reality of climate change in NZ and what it means for how we build

In Brief

▷ The recent extreme weather events in New Zealand will significantly impact the building industry.

▷ Demand for builders in affected regions will surge, and there is a shortage of skilled labour.

▷ Sustainable building practices, including using sustainable materials and designing for energy efficiency, are becoming more important.

The extraordinary weather events of 2023 are a brutal prelude of what to expect in coming years, and the knock-on effects will have a huge impact on the building industry in New Zealand.

Here’s a summary of important issues builders should consider as the recovery and rebuild programme starts.

Building slowdown on pause

Economists recently predicted a slowdown in residential building, but it looks like there will be a pause on that. Any slowdown will likely be confined to geographical areas spared from storm damage.

In other affected areas, including Northland, Coromandel, Gisborne and Hawkes Bay, the estimated number of displaced people is 10,000 plus.

In the areas most impacted, demand for building services will surge. It’s been estimated that up to 1800 households in Auckland alone will need temporary accommodation while their homes are being repaired or replaced.

Moreover, hundreds, if not thousands, of public buildings have been severely damaged and will need remedial work. The most recent estimate to repair the storm damage from cyclone Gabrielle is $10 billion and rising.

A wall of work

Demand for builders in the worst affected regions will likely lead to some re-location of builders from less affected areas, incentivised by higher pay and benefits due to the volume and urgency of work.

The government has also suggested local and national initiatives to build short-term modular accommodation, which could mean constructing temporary “villages” of modular housing or relocating tiny homes and cabins.

The scale of the problem is enormous, and there aren’t enough motels, motor camps or Airbnb’s to accommodate displaced people. Rental properties were as scarce as hen’s teeth before the storms.

In the worst affected areas, many local builders, plumbers and sparkies have been hit hard with damage to their homes, businesses and vehicles, making it almost impossible to do the work they have on their books, let alone the mountain of urgent work ahead. And let’s not forget all the roads that need to be fixed before you can even get to the job site.

No quick fix this time

There is still a significant shortage of skilled labour in the residential building sector and the wider construction industry. Repairing the widespread damage to infrastructure and the ongoing programme to upgrade infrastructure will put massive pressure on the existing workforce. Economic consultancy Sense Partners released a report last month concluding that New Zealand is experiencing the greatest labour shortage of comparable OECD countries.

“Labour shortages are acute around the world. However, the New Zealand experience is particularly intense,” the report says, due to a combination of an ageing population and a slowdown in immigration. Whereas the Christchurch rebuild was supported mainly by immigrant labour, the labour market worldwide is more competitive now. New Zealand’s attractiveness as a destination for skilled workers is not what it used to be.

The future of sustainable building

Many building materials companies in New Zealand have made significant changes in the way they operate, sourcing raw materials that are sustainably managed and using new manufacturing techniques to reduce overall carbon emissions.

Building companies tendering for governmentfunded projects have to demonstrate a tangible commitment to sustainability, and this attitude is becoming more evident in residential building.

While using sustainable materials to help reduce a home’s carbon footprint when it is first built is a key objective, the home’s design plays a massive role in making the house more energy efficient and sustainable in the long term.

Harnessing free energy

Designers are now paying much closer attention to glazing-to-wall ratios, how a house is orientated to maximise solar gain in cool months, and how it uses prevailing winds to assist ventilation and cooling in the warm months.

Where solar panels were a ‘nice-to-have’ option in the past, many homeowners now see them as a musthave, with electricity prices increasing every year.

Water usage is another critical area where significant savings can be made. Reducing the number of bathrooms, specifying water-efficient fixtures and fittings and incorporating on-site rainwater harvesting all contribute to reduced water use.

Will building regulations change?

Building requirements will inevitably change to mitigate potential flooding or storm damage in vulnerable areas, but when these changes come into effect is anyone’s guess. It is conceivable that there will be changes to the NZ Building Code to take into account the likelihood of more frequent and more intense weather events.

Regardless of any regulatory changes that may eventually occur, insurance companies will quickly establish new conditions regarding building (or renovating) a home in areas with a consistent history of flooding, land movement or coastal erosion.

In some cases, insurance companies will refuse to insure properties in the most vulnerable locations, and banks won’t provide mortgage finance.

Where a house can be repaired or rebuilt, insurance companies may require that the building be upgraded in some way to avoid future damage. Their policies usually only pay “to reinstate the building to the condition it was in before the damage occurred” and not for improvements that may be required to reduce future risk, such as raising the floor levels of a house.