Property & Build: June July

built up Vs built Out

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Big changes to common construction contract

New Zealand’s standard contract for the construction of building and civil engineering projects has been revised and released for consultation

The NZS 3910 is the contract most commonly used in New Zealand’s construction industry. However, recent industry and government reports have pointed to significant issues with the contract’s use that may erode relationships between clients and contractors. Such relationships play a critical role in driving construction sector productivity as well as value-for-money in public sector infrastructure spending (around $10 billion each year).

“There’s been overwhelming consensus from the construction sector that the contract needed a comprehensive update”, says Tracey Ryan, co-chair of the Construction Sector Accord.

“The proliferation of special conditions of contract that are often added to address shortcomings in the standard contract was a big focus. The fairness of some special conditions and the continual fiddling with the standard contract has caused big problems for the construction industry.”

In response, the New Zealand Infrastructure Commission, Te Waihanga and the Construction Sector Accord jointly commissioned a comprehensive revision of the contract with support from many within the sector. Standards New Zealand was appointed in late 2021 to lead and manage the revision process, which was done by a committee of

representatives from across the construction sector.

This review of 3910 is the biggest revision the contract’s had since 1987, and the draft version of the revised NZS 3910 is now out for consultation.

“This revised contract aims to bring NZS 3910 in line with the current legislative environment and market conditions,” says Accord co-chair Andrew Crisp.

“The goal is a balanced contract that is fair and reasonable for all parties. This is expected to reduce some need for parties to insert their own lengthy and complex special conditions and help ensure that the contract is fit for the industry in 2023 and beyond.”

The revised contract is only a tool, however, and its use must be accompanied by a major culture shift, says Ross Copland, Chief Executive of the New Zealand Infrastructure Commis-

sion, Te Waihanga.

“While these updates to NZS 3910 are an important enabler of better construction relationships, I want to emphasise the importance of a cultural shift in our industry from a mindset of contractual ‘winners and losers’, to one where public and private client-side leaders champion fair risk allocation and strive to eliminate, manage or accept some risk, rather than just transferring it.

“In order to rebuild a strong domestic construction industry and attract the talent we desperately need the sector needs to be profitable, fair and sustainable. Over the past decade we have seen far too many leading New Zealand construction firms fail and clients are most certainly worse off as a result. Client behaviour will make the biggest difference, so I’m asking our construction

industry leaders to take this opportunity to think about their contract and procurement processes and become champions for better contracting practice”.

The consultation document with the proposed revised standard form contract is now available on Standards NZ website and consultation on it closes on 30 June 2023. All feedback needs to be submitted through the Standards NZ consultation tool.

Register here for a webinar to hear from some of the review committee members on the key changes.

Why are the Construction Sector

involved?

A 2018 report by consultancy Entwine identified significant issues with public sector procurement and contracting of major in-

Accord and Te Waihanga

frastructure projects which impacted the construction sector.

Following this, the Government and industry signed a Construction Sector Accord in April 2019, acknowledging the challenges facing the sector and signalling a shared commitment to transform it. This included a commitment to a more visible pipeline of work and procurement practices that are fair, efficient and predictable. A guiding principle for the Accord is the building of trusting relationships.

In February 2019, the Government announced it would establish the New Zealand Infrastructure Commission, Te Waihanga to help improve how New Zealand coordinates and plans its infrastructure, makes the most of the infrastructure it already has, and ensures that investment in infrastructure delivers what New Zealand needs.

The Accord and Te Waihanga are working to improve how government and the private sector work together to build public infrastructure. Their joint commissioning of the NZS 3910 revision is one example of this work.

What is the NZS 3910 review working to address?

Some key things raised in the Entwine report that this review is aiming to address include:

– Large numbers of special contract conditions effectively make contracts bespoke and these are often not reasonable or well understood by both the public sector and industry. These modifications, along with the use of unfamiliar contract terms, can lead to misunderstanding, confusion, and ultimately, litiga-

tion.

– Specific concerns regarding special conditions that are becoming more common in public sector construction contracts relate to the use of time bars, the lack of liability caps, and the impartiality of the role of the Engineer to the Contract.

– Risk should sit with the party best placed to manage it. The common aggressive approach to risk transfer often means that all risk sits with the contractor. Contractors may also face ‘risk transfer by stealth’ where risk is transferred through appended contract documents such as design specifications. This is not sustainable.

Why is this so important?

In 2019, the construction sector contributed seven percent to New Zealand’s GDP and employed 10 percent of the national workforce. A thriving sector is vital to New Zealand’s social and economic wellbeing. Additionally, the public sector is a major client of the construction sector, spending around $10 billion a year on procuring infrastructure – an amount that could increase significantly in coming years, as we work to address the infrastructure gap identified in Rautaki Hanganga

o Aotearoa New Zealand Infrastructure Strategy. Given such investment, it’s vital that New Zealanders get the best value from this public spending.

Timeline for: Conditions of Contract for Building and Civil Engineering Construction (NZS 3910)

lished following a major revision of its predecessor NZS 623.

2003 – contract updated to align with Construction Contracts Act 2002. 2013 – contract underwent a limited scope review.

2018 – report by Infrastructure New Zealand identified significant issues with public sector procurement and contracting of major infrastructure projects.

Creating Value Through Procurement: A Report into Public Sector Procurement of Major Infrastructure Projects (Entwine, 2018)

2019 – report by Treasury Infrastructure Transaction Unit found a ‘culture of mistrust’ between public sector (clients) and private sector (contractors). And that this results in lots of special conditions that modify standard construction contracts and lead to misunderstanding, confusion and,

ultimately, litigation. It also found a number of related issues.

An examination of issues associated with the use of NZS Conditions of Contract (Treasury Infrastructure Transactions Unit, August 2019)

2021 – Te Waihanga and the Construction Sector Accord jointly commission the revision of NZS 3910 as part of addressing issues raised in the 2019 report. The revision is carried out by a committee appointed by Standards New Zealand and that represents the range of industry and client interests.

9 May 2023 – revised NZS 3910 contract out for consultation.

30 June 2023 – consultation closes.

October 2023 – Standards New Zealand aims to release the final NZS 3910:2023 contract.

How BIM Will Impact Your Future Infrastructure Projects

For nearly 40 years, building information modelling (BIM) has been a mainstay in architecture circles within the industry. But it’s only really gained ground in actual construction over the last two decades. If your company is among these near-future BIM adopters, what impact can you anticipate for your projects?

Financial efficiency with better use of capital project data

Having to rely on traditional construction practices involving 2D drawings and decentralised project details can be very limiting. Think of all the data that starts rolling in from day one. And it continues to accumulate when the completed project has been handed over to the owner’s operations and facility management team. It can be somewhat of a challenge, not to mention overwhelming, to track and understand everything.

Buy that’s where BIM can help. What often makes it stand out is the BIM model’s ability to link directly to all the details associated with each individual element within it, from the smallest nail to the largest volume of concrete. Those include all usable and actionable data, including size, current cost, replacement value, lifespan, warranty information and more. These specific details — or project intelligence

— can be leveraged again and again throughout the project’s construction and beyond from within its own common data environment (CDE).

The key is to enter all that data into the BIM model during the estimate phase so it can serve as an interactive reference going forward. That’s when it becomes the foundation for data-driven decision making. Based on the model-linked data, the owner, contractors and other stakeholders can evaluate and agree on the most appropriate material and equipment options to invest in for the project based on cost effectiveness, durability and/or repair record, for example.

Optimised design phase efficiency

Building your project through BIM before real

construction begins opens up opportunities to experience things you hadn’t been able to with traditional design methods. For instance, designing a structure through BIM modelling frees you up to experiment with variations on materials, exteriors, door and window placement, layout configurations, and more. You’re able to virtually

for change orders for anything from minor alterations to full-on budget-eating rework down the road. You preserve not only the original cost and schedule estimate, but your profit margin.

Maximising design phase efficiency with BIM means being confident that those choices you make for your future capital projects are cost-efficient with regard to the construction estimate and to future maintenance after handoff.

Interactive data to foster interactive teams

walk through a model for a realistic view of the flow, the aesthetics, the space, and even any design mistakes to fix on the spot.

The BIM process also acts like a risk mitigation tool enabling you to discover structural and spatial interferences through automated clash detection. Catching these early enables you to correct them at the design stage — before they’ve had a chance to be built into the structure, which would set the stage

Being able to access and interact with all your projects’ constantly updated details at such a granular level is the kind of transparency that sets the stage for better understanding of the build and more effective communication among project teams, including those disciplines that may not normally have had a seat at the design table.

With all the data linked from the model housed in BIM’s CDE, it serves as a central hub where everyone can interact with the wealth of information it contains. Teams can interact with each other — sharing updated models, asking and answering questions, suggesting modification ideas, reviewing solutions to problems oftentimes before they occur.

Tech needed to drive construction productivity

These challenges are already driving construction company insolvencies in Australia and technology is needed now more than ever to drive productivity in the industry, Autodesk says.

Its APAC Industry Strategist, Sumit Oberoi says the construction sector has unfortunately seen a number of collapses, with at least 20 construction companies in Australia folding in 2022.

“There are multiple factors involved such as a challenging procurement environment, labour and material shortages, extreme weather and supply chain disruptions.”

And yet, a total of $255 billion in Australian Government expenditure has been allocated to infrastructure over the four years between 2022-23 and 2025-26 – a three per cent increase over last year’s allocations. Additionally, in the October 2022-23 budget, the Australian Government announced an investment of almost $1.4 billion for vital land transport infrastructure projects in NSW alone to improve safety and reduce travel times.

“Government infrastructure and private commercial construction spend is increasing with the need to deliver more vital land, transport and housing projects across the country, and yet we’re seeing more construction companies under stress despite this increase in work,” says Oberoi.

“The industry is at a crossroad, and greater operational efficiencies are required to maintain competiveness. We have found that when a company adopts technology there is a direct positive impact on their revenue.”

This month, Autodesk announced the launch of its joint report with Deloitte, The State of Digital Adoption in Construction Report 2023, which surveyed 229 construction and engineering executives across Australia, Japan and Singapore’s architecture, engineering and construction (AEC) sector about how digital adoption affects them and what their outlook is in the face of such uncertain times.

Deloitte Access Economics Partner David Rumbens says the survey showed nearly nine in ten AEC businesses are investing in new technologies, and businesses with higher levels of digital adoption are more optimistic about the future and more likely to have international operations.

“Additionally, 61% of AEC businesses see using new technology to deliver projects as a key source of growth. Nearly two in five businesses are using Building Information Modelling (BIM) and cloud manage -

ment software, while over a quarter of businesses are expecting to implement these technologies in the future.”

Oberoi says it is clear construction companies across Australia increasingly understand that to remain competitive in today’s marketplace, they need to innovate.

“However, some of the challenges to increasing technology adoption in the industry will require addressing, including upskilling staff, change management and budget allocation.”

Additional key findings included:

• 96% reported that previous digitisation efforts have boosted their business.

• For nearly half (45%) of businesses, the impact from digitisation efforts has already been high or very high

• Firms using more tech than average are 30% more likely to be optimistic about the future

• Just under two in three of (61%) businesses said using new technology to deliver client work would be a main source of revenue growth

• Nearly half said that growth would also come from using digital tech to improve internal processes

• Singaporean businesses are most concerned about high material costs and labour shortages

• Australian businesses are most concerned about uncertain economic conditions

• Japanese businesses are most worried about economic uncertainty and lack of skilled workers.

About Autodesk

Autodesk is changing how the world is designed and made. Our technology spans architecture, engineering, construction, product design, manufacturing, media and entertainment, empowering innovators everywhere to solve challenges big and small. From greener buildings to smarter products to more mesmerising blockbusters, Autodesk software helps our customers to design and make a better world for all. For more information visit autodesk.com or follow @autodesk.

The construction industry is at a crossroad, with the need to deliver increasing infrastructure, transport and housing projects but in the face of global supply chain disruptions, extreme weather and increasing material and labour costs

The latest report from Auckland-based BWA Insolvency shows a steady increase in business failures across the country, with the triple whammy of price increases, supply shortages and decreasing demand affecting a range of different sectors.

In Q1 2023 (Jan 1 – Mar 31), there were 355 formal insolvency proceedings lodged in New Zealand compared to the corresponding period in 2022 when there were 277. That’s an overall increase of 28%.

The data offers a snapshot of the health of the business sector and New Zealand’s significant year-on-year increase in insolvencies is part of a global trend.

Governments worldwide were blind to the inflationary consequences of the free money dished out in Covid. Now the medicine to deal with the issue has become the poison and a 28% increase is consistent with the notion that an economy awash with liquidity while producing nothing camouflaged poor performing fundamentals. Many of these companies that have closed will have had issues for years, so when the tap was turned off, the underlying issues could not be managed.

Construction (90) and property and real estate (39) had the highest number of formal insolvency proceedings by sector in Q1 2023. Construction insolvencies were up 53% yearon-year, an inevitable result given the impact of price increases and reduced demand starting to bite. In the construction sector, you might need the money from Project B to finish off Project A but if Project C doesn’t come in, the whole thing starts to fall over.

Compared to the previous

Construction insolvencies up 53% in one year

It is no surprise that the construction had the highest number of formal insolvency proceedings out of any sector in Q1 2023, followed by property and real estate, BWA Insolvency founder Bryan Williams says

quarter, total insolvencies were down by 22% in Q1 2023, and this is more a timing issue than being reflective of a trend.

Manufacturing had a 61% drop to 14 and business services was down 42% to 31, while the retail sector had one of the highest increases for the quarter, up by 21% to 29.

While the year-on-year increase in insolvencies does not come as a surprise, the economy has not fared as badly as many expected. While inflation looks to have peaked along with the Reserve Bank’s interest rate hikes and Cyclone Gabrielle and the Auckland floods are likely to provide a boost in the construction sector

as there is high demand for repairs and rebuilds, insolvencies are expected to continue to rise this year as companies that have held on by the skin of their teeth through the Covid era now confront the headwinds of anti-inflationary measures.

The companies that will survive are those that have management capability and economic scope to allow them to shed expenses and adapt their business. The more captured the business is by fixed costs, the more difficult it is to rescale.

During tough times, it’s even more important for businesses to keep evaluating their operations.

Often failure can be avoided if directors con-

stantly review and refine the fundamentals of their business. You’ve got to cut your coat to suit your cloth and often a good way of designing that garment is to get help as soon as seems it is required.

BWA Insolvency has been tracking the data on liquidations, receiverships and voluntary administrations since 2012. The Registrar of Companies Office records the filings of companies that have gone into a formal state of insolvency. BWA then does a deeper investigation on each company and categorises them to show trends across different industries and regions.

Hard work gets results

The success of Rapid Facility Services is driven by a team that combines experience, commitment and a professional skillset that covers every aspect of facilities management with personal service

The team was forged by three friends working in the industry who realised that the key thing stressed building managers, business owners and landlords needed was to make a single call and get a reliable and qualified support team that would cover any aspect of facilities management.

The Rapid trio set down a business philosophy that “we will do what others can’t or won’t do “ and set about assembling a highly trained, efficient and safety-conscious team of professionals who get the job done right, the first time.

Today that service stretches from food manufacturers’ audit cleaning, all aspects of industrial cleaning, painting, building and floor safety management to anti-microbial and moss

ceilings,

Having worked in the industry for many years, three friends, Paul Schoch, Robyn Schoch and Andrew Chan realised that by combining their skills, they could create a company unlike any other

Team members Darren, Brandon and Akeli

and mould treatments to prevent surface damage to roofs,

walls, floors and specialised equipment.

Clifftop build wins Australian Home of the Year

At the Housing Industry Association’s 2023 national Australia conference, the winners of the 2023 HIA-CSR Australian Housing Awards were revealed, with judges calling the overall winner ‘a once-in-a-lifetime build’

The winners of the 2023 HIA-CSR

Australian Housing Awards were unveiled before 550 industry leaders at the awards ceremony held as the final night of the HIA 2023 National Conference on Hamilton Island.

Described by Housing Industry Association (HIA) judges as ‘a once-in-a-lifetime build’, a cliff-hugging home by Tasmanian builder Lane Group Construction has been named the 2023 HIA-CSR Australian Home

2023 HIA-CSR Australian Housing Awards winners

• Australian Home of the Year, Partnered by CSR – Lane Group Construction, Tasmania

• Australian Apartment of the Year, Partnered by Toyota for Business – K2 Built, New South Wales

• Australian Apartment Complex, Partnered by Daikin Australia – Coben Building, Victoria

• Jim Brookes Australian Apprentice, Partnered by Stratco – Bethany Mercieca, New South Wales

• Australian Apprentice Host Trainer – Jethro Urwin, Apex WA Carpentry Solutions, Western Australia

• Australian Bathroom of the Year, Partnered by HIA Business Solutions – Greenbuild Constructions, Hunter

• Australian Bathroom Design, Partnered by HIA Business Solutions – Catherine de Meur Interiors, NSW

• Australian Custom Built Home, Partnered by ActronAir – Lane Group Construction, Tasmania

• Australian Display Home, Partnered by Clipsal by Schneider Electric – South Coast Constructions, SA

• Australian Kitchen of the Year, Partnered by Robam Kitchen Appliances – Craig Linke Bespoke Building, SA

• Australian Kitchen Design, Partnered by Robam Kitchen Appliances – Darren James Interiors, Queensland

• Australian Outdoor Project, Partnered by James Hardie – Lane Group Construction, Tasmania

• Australian People’s Choice Home, Partnered by CSR – Greenbuild Constructions, Hunter

• Australian Project Home, Partnered by The Australian Reinforcing Company – The Rural Building Company, WA

• Australian Professional Major Builder, Partnered by Companion Systems – Carlisle Homes, Victoria

• Australian Professional Medium Builder / Renovator, Partnered by Companion Systems – Hudson Homes, NSW

• Australian Professional Small Builder / Renovator, Partnered by Companion Systems -Ultimo Constructions, WA

• Australian Renovation / Addition Project, Partnered by COLORBOND steel – BCG Constructions, Victoria

• Australian Small Business Management, Partnered by HIA Insurance Services – Jenny Matek, AM Bathrooms + Projects, New South Wales

• Australian Spec Home, Partnered by Stratco – Averna Homes, Western Australia

• Australian Specialised Housing, Partnered by Merlin Garage Door Openers – Alroe Constructions, Queensland

• Australian Townhouse / Villa Development, Partnered by Brickworks – Futureflip, New South Wales

• Australian Townhouse / Villa of the Year, Partnered by NatHERS – Mactech Constructions, Queensland

of the Year – the highest residential building award bestowed each year by HIA.

The spectacular single-level winning home is anchored to its windswept, bushland location by a series of heavyset stone pavilions.

An abundance of floorlength glass windows create a serene atmosphere for the owners and their guests to enjoy, connecting them to the magnificent, rugged coastline of the Derwent River from all public and

private living areas.

Burnished caramel concrete floors and spotted gum timber cladding serve to perfectly match the earthy tones of the expertly wrought stonework featured so prominently in the home, while the cantilevered indoor/outdoor infinity pool, spa and sauna are an indulgent addition to this entertainer’s domain.

The home also won HIA Australian Custom Built Home, partnered by ActronAir.

HIA’s Managing Director Graham Wolfe said the HIACSR Australian Housing Awards recognise the best in Australia’s residential building industry.

“HIA is committed to recognising the outstanding achievements of our members. The HIA-CSR Australian Housing Awards allow us to acknowledge their skill and their commitment to quality in design, material selection and construction. Our Awards’ program brings together

members who excel in building exceptional homes, kitchens and bathrooms and run highly successful businesses.

“HIA Award winners build with exceptional workmanship; demonstrated in projects that push the boundaries in design and innovation. It is my absolute pleasure to congratulate each winner for their hard work and commitment to excellence,” Mr Wolfe added.

The HIA-CSR Australian

Housing Awards recognise exceptional projects, businesses and people from all around Australia.

Apprentice Bethany Mercieca from NSW was named the HIA Jim Brookes Australian Apprentice of the Year for a strong work ethic and dedication to her craft. She has built meaningful relationships with co-workers, suppliers and clients through excellent communication. The category is partnered by Stratco.

A sophisticated restoration and addition of a heritage-listed bluestone residence by Victorian builder BCG Constructions won HIA Australian Renovation / Addition Project, partnered by COLORBOND steel. The home is a breathtaking fusion of old-world glamour and ultramodern elegance.

Western Australia’s Ultimo Constructions was named HIA Australian Professional Small Builder / Renovator for the fourth time, reinforcing their reputation for offering personalised service, expert advice and a partnership approach to the building process. The category is partnered by

Companion Systems.

Craig Linke Bespoke Building from South Australia took out HIA Australian Kitchen of the Year, partnered by Robam Kitchen Appliances, for a stunning kitchen finished in a symphony of aged brass, granite and exotic marbles, with a custom brass canopy.

Hunter builder Greenbuild Constructions won HIA

Australian Bathroom of the Year for a moody aesthetic master bathroom that feels luxuriously spacious and light. The category is partnered by HIA Business Solutions. Greenbuild Constructions also won the consumer-voted HIA-CSR Australian People’s Choice Home

The HIA-CSR Australian Housing Awards are the

ultimate platform to showcase the talents of the nation’s top builders and designers. Winners are selected from state-based finalists, with awards in 23 separate categories including Professional Builders, display home, apprentice, bathrooms and kitchens. The Awards are partnered by leading building products company CSR.

SLABX200 is specifically designed to deliver high compressive strength and improve insulation under concrete slabs.

Developed by trusted Kiwi insulation experts EXPOL, this exciting new innovation has quickly become the product of choice for specifiers and others in the construction industry.

Why do I need to insulate the concrete slab?

Slab insulation is important not only to save on energy bills for future owners and tenants, but also to improve comfort.

Insulation will reduce heat loss and make the slab easier to heat. It offers a layer of projection against moisture and will provide a thermal mass to regulate temperatures.

If embedded floor heating is incorporated in a concrete slab-on-ground, the slab must be insulated so that heat from the slab is delivered up into the space above and not lost to the exterior and ground below.

Wayne

a visual check of SLABX200 to ensure it meets EXPOL’s high technical specifications.

Kiwi innovation leading the way in concrete slab insulation

A new generation of Expanded Polystyrene Board insulation has arrived

What makes SLABX200 different?

We chatted to Wayne Watson a Structural EPS and GeoFoam Consultant at EXPOL to see what makes SLABX200 different.

Wayne told us that due to its compressive strength rating of 200Kpa there is no comparable product on the market. He states “SLABX200 is specifically designed for insulating concrete slabs.

It has a rating of 200kpa at 10 percent compression or 20 ton per square meter.

Its high performance specs are designed to give Engineer’s peace of mind so that they can recommend this product with 100 percent confidence”.

The team at EXPOL recognised that there was nothing on the market that offered a cost-effective yet high performance solution to concrete insulation. So they set about to develop a product with New Zealand residential and commercial projects in mind.

The durable nature of SLABX200 means that it won’t degrade over time, keeping its integrity for the life of the structure.

Due to the lightweight nature of Expanded Polystyrene the product is also easy to handle and install making quick work of slab insulation on site.

How does this product compare to Healthy Homes standards?

The Healthy Homes insulation standards across New Zealand states than underfloor insulation should have an R-Value of 1.3 or

greater.

With several thicknesses available SLABX200 ranges from an R-Value of R 1.5 at 50mm thickness through to an impressive R6.0 at 200mm thickness.

Therefore, all thicknesses offer R-Values over and above the standards to ensure healthy and efficient homes.

How does this product work in my sustainable building project?

The team at EXPOL are committed to the environment. In a true closed loop process 100 percent of manufacturing waste is recycled in their seven recycling plants nationwide.

Expanded Polystyrene offers great eco credentials and at the end of a products life it can be turned into other EXPOL products.

The high performance of the SLABX product also ensures that your building project is sustainable to heat and cool and therefore leading to less energy consumption over the life of the building.

If you’d like to learn more about the SLABX200 product, the team at EXPOL are happy to have a chat. Visit their website on www.expol.co.nz or give the Technical Manager at call on 0800 86 33 73.

Watson Technical Manager EXPOL doing

Chemical safety relies on meaningful cooperation

Expanding government-industry partnerships to help business operators should be a no brainer. Inviting enquirers to read the regulations falls well short of educational expectations

Increasing community concerns about vulnerability to unwanted chemical exposure and damage to our fragile environment places additional pressure on both suppliers and users of the chemicals.

We all need to sustain and improve our quality of life and these products must be safely managed throughout their life cycle.

places, by responding to workers’ suggestions about improvements.

Conscientious business operators can add value by sourcing accurate, cost-effective workplace chemical safety advice and compliance tools from their suppliers, industry partners and Responsible Care NZ.

However, they all obtain their chemical requirements from suppliers and can benefit from product stewardship advice and cost-effective industry compliance initiatives.

Today, chemical suppliers and their customers continue to adjust to the Covid operational environment.

They struggle with supply chain delays, the loss of experienced staff, frustration with unanswered queries to risk-averse authorities, inflexible and prescriptive regulations, rising compliance costs, diminishing resources and increasing public chemical safety expectations.

While 130,000 businesses are reportedly captured by the Hazardous Substances and Major Hazard Facilities regulations, the official mantra of “600-900 persons seriously harmed each year by unwanted exposure to chemicals in their workplace” presumably applies to all of the country’s 530,000 workplaces.

Downgrading the flawed but effective HSNO Certified Handler requirement has inadvertently undermined an invaluable capability.

The action deprived businesses, particularly SMEs, of an immediate and recognisable source of workplace chemical safety and compliance advice -- a safe chemical handling capability and emergency response knowledge – critical when a chemical incident occurs.

PCBUs and SMEs must now devise their own solutions to ensure employees are competent to safely handle the chemicals with which they work.

Chemical industry leaders are moving away from relying on lagging indicators of safety performance in favour of identifying safer work practices and work-

A proven strategy is government agencies collaborating with proactive industry associations to best achieve workplace safety aspirations. The problem is that SMEs rarely join associations.

Responsible Care NZ extols less regulation in favour of enabling business operators to be increasingly self-sufficient, using cost-effective products and services such as site compliance assessments and specialist training.

The focus is keeping people safe around the chemicals we encounter every day by adding value to businesses.

Chemical suppliers continue to help customers achieve workplace chemical safety aspirations through product stewardship initiatives.

To help solve the in-house chemical compliance dilemma in New Zealand, Responsible Care NZ delivers specialist and cost-effective Certified Handler standard training, complete with a certificate.

Responsible Care NZ site compliance assessments are non-threatening, effectively capturing and assessing chemical safety performance in a variety of workplaces. +64 4 499 4311

Barry Dyer Chief Executive Responsible Care NZ

Responsible Care is a global voluntary chemical industry initiative developed autonomously by the chemical industry for the chemical industry.

Global cities are fundamentally different to New Zealand cities which makes the geographic boundaries difficult to compare. Regardless, the themes around location preferences are transferrable across geographies and provide important insight. We consider ‘city centre’ to be more comparable to the Auckland isthmus, and ‘suburbs of a major city’ relevant to other suburbs in the Auckland urban area.

The survey showed that 36.4% of global respondents live in a city centre, with a further 24.0% living in the suburbs of a major city. Relatively few (9.2%) live rurally.

Education levels have a strong impact on the location results. For respondents with no formal education, they are most likely to live in a small town, whereas more than half of respondents with a PhD qualification live in a city centre.

Income level has a similarly strong correlation with dwelling location. 12.5% of low income households live rurally, compared to 7.2% of mid income households and 3.1% of high income households.

Age has less of an impact than education and income indicating that it is easier to achieve this

What does the future look like for housing in New Zealand?

Last year, CBRE polled more than 20,000 people worldwide on how they want to live, work and play, but are the results applicable to New Zealand and how can they help guide strategies going forward?

type of diversity across geographic boundaries. The most common location for all generations except Baby Boomers was a city centre. The proportion of people living in a city centre increases up until a person is in their early 30’s before slowly declining in favour of the suburbs.

Global centralisation is getting stronger

City centres as the primary desired residential locations have strengthened since the pandemic and there are indications that this will continue. A quarter of respondents moved to a new house within the last two years, and of those that did, the largest proportion have

moved to a more central location in the same city. A third of people are planning to move within the next two years, and once again ‘same city – more centralized’ is the most common response.

Implications for New Zealand cities

Global preferences don’t always apply locally however in this case the desire for more central locations is evident in responses from nearby Australia and especially from across Asia. Respondents in these countries indicated that being in the same city in a more central location was preferable to other options. This bodes well for future

housing demand in New Zealand cities such as Auckland which despite recent price falls remains the most expensive region in the country.

Immigration policy could accelerate some of the centralization that New Zealand cities are experiencing by bringing in a demographic that has demand for city centre living. Targeting of educated and/or high income immigrants for whom the survey has shown to be a significant proportion of a city centres population could further increase demand for housing in New Zealand cities.

Higher cost of city centre living is traded off with other tangible benefits such as proximity to a wide variety of goods and services as well as greater investment into public amenity. In trading off the benefits of city centre living with the disadvantages, the global survey has shown that for most people, city living prevails.

Ownership preferred

Most of the global respondents own their home. 59% of the survey respondents own their home, either with

or without a mortgage. This compares to 65% for New Zealand as at the 2018 Census.

The proportion of people who own their home increases with age. Younger people tend to rent or live with family. As people move through the education system they become less likely to live with family and more likely to rent or own. Interestingly, for Gen-Zers undertaking postgraduate studies at University, more than half of them own their home despite their young age. It is probable that they receive financial support from parents for this.

The likelihood of being mortgage free increases with income level and age. 48.1% of Baby Boomers own their home outright, compared to 24.2% of Millennia ls. Outright ownership is lower in countries with a secure long term rental markets such as Finland (12.9% own without a mortgage), Sweden (12.4% own without a mortgage), and The Netherlands (7.8% own without a mortgage).

New Zealand home ownership is declining

The home ownership rate in New Zealand has declined over the past three decades, moving from 74% in 1991 to 65% in 2018. Strong residential price growth from late 2019 to

Location plays a central role in deciding where people live because having access to a wide variety of quality amenities is important. Cities provide a hub of amenity and for this reason they will prevail.

Over the past few years city suburbs in New Zealand cities have been gentrifying. A desire for ownership among young people priced out of the market has shifted them to the periphery. Suburban town centres had been in decline over the past few decades as business centralized into CBD’s and regional malls, however work from home and the ‘support local’ movement has breathed new life into them.

In 2023 we expect to see a greater level of amenity incorporated into new housing development. Amenity may be provided at an individual property level, but this is expensive. It is more likely that developers will leverage existing amenity or incorporate new amenity at a building or community level. This aids overall affordability while retaining quality of life.

late 2021 means that this trend of decline is likely to be observed in the results of the 2023 Census; although prices have fallen throughout 2022, a doubling of mortgage interest rates keeps cost high.

CBRE’s 2016 millennial sur-

vey showed that New Zealanders do have a strong desire to own their own home. However, the high value placed on location and quality of life means that people are willing to trade off tenure for this.

Amenity is key

What does this mean for Build to Rent?

With a declining home ownership rate is a higher proportion of households living in rental housing. More participants in the rental market means a larger and broader demand base for purpose-built longterm rental housing.

A major theme coming out of CBRE’s Live Work Shop survey is that post pandemic values around living have changed. Quality of life is a top consideration – people want to live well and enjoy their daily lives. Home ownership may be a goal, but it is being pushed out. People are less willing to accept a poor quality of life with achieving home ownership earlier in life.

The themes and results of the global survey are supportive of build to rent housing. High quality residences in central locations are extremely important, alongside health and safety and spaces that support a hybrid work environment. Transience of the growing renter community also provides opportunity to attract occupants with a superior new build offer. The survey data showed that 48.1% of renters plan to move in the coming two years. While some will move into ownership, the top ranked feature that renters are seeking is a better quality property (40.9%) followed by better surroundings/community (36.2%). These priorities are also true for owners who are looking to move.

Typology tipping point

50.6% of total respondents live in an independent house however the proportion for owners is 62.0% and for renters it is 24.7%. With urbanization on the rise globally there will soon be a tipping point where

non-independent house typologies accommodate most of the population.

New Zealand is several decades away from reaching this. The only apartment market of scale is in Auckland, with 7.6% of all dwellings being apartments. This market has experienced significant growth since the early 2000’s when apartments comprised 1.9%of total stock. In comparison, 45.7% of European respondents live in an apartment.

Outside of geography the major determinant of typology is tenure. More than half of Millennial and GenXer renters live in apartments. Even Baby Boomer renters are predominantly in apartments, however, there appears to be a preference for independent housing if income allows.

19.6% of low-income Baby Boomer renters live in independent housing compared to 45.8% of high-income Baby Boomer renters.

The prevalence of re -

mote work has accelerated throughout the pandemic, however only 60.8% of survey respondents noted a dedicated work/study area in their home. While income group is the main determinant of whether a dedicated home workspace is present, preferred work style also influences the likelihood of having a suitable space. 78.9% of people who prefer entirely remote work have a dedicated work/study area, compared to 47.9% of people who prefer entirely office-based work.

Covid has changed priorities in living

The Covid-19 pandemic has had a direct impact on global housing priorities. Several property features that were previously considered to be nonessential ‘nice to haves’ have increased in importance to be key drivers of property decisions. Quality of property management on health and safety, outdoor space, and

having a WFH space has become more important for over half of the people surveyed. Figure 7 shows that these three factors are now primary considerations for many people when they are choosing a property.

Younger generations especially value good property management. Almost two thirds of Gen-Zers and Millennia ls consider this to be of increased importance, including over 70% of high-income Millennials.

Despite an increased importance of various property features, an inflexible constraint is price, either for ownership or rent. These two factors have been identified as the most important for survey respondents. For renters across all age groups, price has had the largest increase in importance.

How to be competitive as a developer

People want spacious, high-quality residences

in central locations that support personal wellbeing, good health, and a flexible work environment. Critically, they need to be able to afford the dwelling and find it an attractive offer compared to other options in the market. The challenge for developers is being able to fulfil this criteria profitably.

Declining land values provide an opportunity to secure urban sites at lower cost. City suburbs that are adjacent to more desirable or expensive suburbs have potential for housing that features several of the factors that people consider important while enabling their development/maintenance cost recovered in sale price or rent. Including property features that have increased in importance since Covid with only a slight compromise on location could draw buyers from adjacent suburbs that they consider to be equally affordable but that do not provide several of the features deemed important.

Conclusion

The survey produced data on some of the theories arising since Covid as to how people want to live, work, and shop in the future. While it is true that many people have a technology enabled capability to work remotely, and could access more affordable housing by doing so, most people prefer to live in centralized areas that are well connected. They also desire home ownership, but greater emphasis on post pandemic quality of life and continued lack of affordability is pushing achievement of this goal further into the future.

A compromise is denser housing typologies which enable quality of life within

financial constraints. In the New Zealand context, this means more terraced houses. Value placed on private

outdoor space is met, along with location, quality, and community. This typology will be supported by

apartments in locations where the higher build cost is absorbed by effective demand.

It’s important to start with the primary outcome of a National-led government implementing this plan – the ability for Councils to opt-out of the MDRS. Instead, National plans to introduce ‘Land for Housing Growth Targets’ for Tier One and Two urban areas in New Zealand. This gives Councils the ability to opt out if they provide “30 years’ worth of developable housing capacity” in the short term, elsewhere through higher density in centres and walking catchments, or in greenfield developments.

This doesn’t go far enough. Many councils will not have to do much to meet 30 years of theoretical capacity in their district plan. It does not mean we will actually get the capacity where we need it, which is in the most central locations close to jobs, education and services. National’s plan provides an opportunity for councils to opt out of this if they face challenges from the existing residents. Furthermore, full implementation of the MDRS in district plans, would almost deliver more than 30 years theoretical capacity. For the development market to function effectively, there is a need for significantly more theoretical capacity, to ensure that enough financially feasible sites can be purchased and developed. As a headline, 30 years can seem to be enough but a majority of the supply will likely not be realised. Therefore, it needs to go further. To meet the 10-to-30-year demand will require significantly more capacity again. I think we should be going much further now and the MDRS, ideally with some improvements, would be a step in the right direction.

National’s new housing strategy

‘a mixed bag’

Secondly, this policy doesn’t necessarily ensure housing supply where it is required or ensure variety of typologies and sizes of dwelling can realistically be built to meet varied demand. We should be seeking to enable an abundance of housing capacity, which will support higher housing supply and choice, in terms of typology and location. However, while they are backing down to some

extent on the MDRS, which is disappointing, there are some good new policies in this plan.

Mixed-use development around rapid transit

Firstly, National intends to strengthen the NPS-UD requirement for councils to zone for at least six storeys in the walking catchments of rapid transit stations and major town and city cen-

tres, to enable mixed-use development.

This would be excellent. Enabling mixed use development, particularly for retail and commercial floors to residential buildings is critical to supporting medium to high density living, with access to daily needs provided through proximity. The only concern I have with this policy is its potential to slow down the “fast track” plan change pro -

Though National’s decision to somewhat back down on the Medium Density Residential Standards (MDRS) comes as a disappointment, there are some good new policies in this plan, Better things are possible author

Malcolm McCracken writes

An 8 storey, mixed-use development in Greenlane, Auckland with a small supermarket on the ground floor, shows exactly the sort of development we should be encouraging around our rapid transit stations.

cesses underway to enact the NPS-UD. In the medium term, we should be aiming for small scale retail and commercial to be a permitted activity in all residential neighbourhoods to promote local living.

Removing greenfield subsidies

National also plan to require local councils to ensure that infrastructure for new greenfield development will be funded from rates and levies applied to the new development, instead of being subsidised through rates from other communities. As I have previously covered, given the incredibly high infrastructure costs of greenfield development, the current subsidies for greenfield development make little sense, when it also contributes to higher emissions from our transport system. I think this would be a seriously positive climate perspective, as it could further shift demand towards urban intensification and allow councils to concentrate on the existing urban area.

Strengthening central government powers and financing mechanisms

The second section of their policy focuses on infrastructure financing tools. All of which vary from fine to good. National plan to reform the Infrastructure Funding and Financing (IFF) Act, which enables the use of Special Purpose Vehicles (SPVs) to raise debt and fund infrastructure. I have previously covered the use SPVs in Tauranga which was extremely positive in my view but is a rare example. It is not clear why there has not been greater uptake of this financing mechanism but National is

proposing to put it all within the management of Crown Infrastructure Partners, in aim to simplify the process.

National also plans to introduce value capture mechanisms for major projects that unlock housing growth, as major projects tend to increase land values in the surrounding area to the benefit of existing land owners, at cost to the public. This could be really positive for major transport infrastructure projects and based on previous comments from other parties, this could have strong bipartisan support. My primary concern is the wording of the document, which seems to suggest public transport infrastructure is only required for existing urban areas. If we are to have greenfield expansion of our major centres, this needs to include rapid transit.

The third section of Going for Housing Growth focuses on incentives for councils. Build for Growth is a $1 Billion fund that will be distributed based on the number of building consents Councils issue above their 5-year average. This does offer a serious incentive for Councils with $25,000 for every dwelling they consent above average. According to National’s policy document, this means Auckland Council would have been eligible for a payment of $152 million last year, while Tauranga, who did not exceed their 5-year average, would not have been eligible for any payment.

This fund has a lot in common with the Infrastructure Acceleration Fund and in principle, I support the idea of incentives to shift Council’s to be pro-growth. However, I worry this could end up favouring Councils who historically have not consented enough, whereas

areas like Auckland, which has much higher consent rates on the back of the Auckland Unitary Plan, may find it harder to surpass the historical average. Especially in a slowing market.

The funding for Build for Growth, seems to be proposed to be redistributed from various existing funds managed by Kāinga Ora. My key concern here is how this will limit the ability of Kāinga Ora developments to keep alive the medium to high rise construction market in a slowing housing market, which is impacting new build sales. It would also take funding which allows Kāinga Ora to buy new land, in towns and neighbourhoods where they don’t have existing land holdings, reducing the ability to provide social housing where it is needed.

National also say they will legislate to give central government reserve powers to rezone land where required to achieve Housing Growth Targets. This generally seems positive given the historical failings of local government and political blockade that can occur, like in Christchurch in 2022 , where the Council refused to adopt the MDRS.

Other changes

There are a number of other changes, here is a high level summary:

• A “Refocused National Policy Statement on Highly Productive Land”. National plans to update the NPS-HPL to keep protection of the most productive soils (LUC 1 & 2), while allowing for LUC-3 category land to be opened up for development.

• Requiring future zoned greenfield land to be live zoned now.

It is unclear how this is intended to balance the need for commercial and industrial land in greenfield areas. It could also create conflict with the (excellent) requirement for greenfield infrastructure to be self-funded. The details are unclear on this from what is a high-level policy document.

• Encouraging additional density in transport corridors would be great but the 30-year requirement is unlikely to be enough to push councils into any major changes.

Conclusion

In summary, providing the opt-out from the MDRS is likely to lead to a reduction in housing capacity and housing choice. I don’t think providing the choice councils will necessarily lead to more or better housing supply. However, there are some strong policies on mixed-use development, reducing public subsidy of greenfield development, and infrastructure financing, that would be positive if implemented. The best outcome for housing and climate would be an improved MDRS, alongside these more positive proposed policies from the National Party.

Malcolm McCracken is a Transport Planner with Sustainable Transport Consultancy, MRCagney. Malcolm has diverse experience in transport planning & strategy, policy development, and transport and land-use integration. He is also currently undertaking a Masters in Public Policy at the Auckland University.

Better things are possible

Planning for and providing urban green spaces of any description, public and private, should not be optional,” the Commissioner says in a new report.

“The environmental services green spaces provide – such as temperature regulation, stormwater management, air filtration and habitat provision –don’t just benefit individuals. They benefit everyone around them. They are a form of infrastructure every bit as important as pipes and roads.

“The ability of our trees and parks to filter stormwater flows and cool their immediate surroundings can mitigate some of the heat and excess water that impervious surfaces generate. These services will be in even higher demand as our cities become hotter and more subject to extreme rain events in a changing climate.”

The Commissioner’s report, Are we building harder, hotter cities? The vital importance of urban green spaces, presents new data on how public and private green space in Auckland, Hamilton and Greater Wellington has evolved over the decades.

“New Zealand cities are currently well-endowed with green space, though some suburbs are greener than others. But our data show that urban green space has been declining over time. Between 1980 and 2016, green space per person fell by at least 30% in Auckland, and at least 20% in Hamilton. Nearly all of this loss occurred on private residential land,” the Commissioner says.

The report found two main factors have driven this trend. The first is infill development – the conver-

New Zealand cities losing their leaves

As we densify our cities to accommodate

sion of yards and sections into houses and driveways in existing urban areas. The second is a shift towards larger houses on smaller sections in new subdivisions.

Many councils are struggling to improve the quality and availability of public green spaces to compensate for the loss of private yards and gardens.

The trends documented in this report were already playing out before recent Government moves to promote further intensification. The Medium Density Residential Standards will place particular pressure on private residential green space in years to come.

The Commissioner offers several proposals to ensure that the contribution green space can make to urban environments is fully accounted for in future urban design.

One solution lies in building upwards rather than via low-rise infill development. Building upwards uses urban land more efficiently and reduces pressure to develop green spaces elsewhere in the city.

More attention could also be given to counteracting the loss of private yards and gardens by improving nearby public green space. In the short term, this could be done by adding patches of larger shrubs and trees in local parks, road reserves and other neglected corners of public land.

The difficulty of retrofitting green space into existing neighbourhoods highlights the importance of adequately providing it from the outset in new subdivisions on the city fringe. Councils could take a more proactive approach to land acquisition for future parks and reserves to help achieve

this.

Green spaces provide benefits over potentially very long time horizons. Looking forward, the ongoing shift towards more densely populated cities and the emerging impacts of climate change will very likely make urban parks, reserves, gardens, vegetation and street trees even more valuable.

The difficulty of re-establishing green space once lost makes it all the more important that planning and providing for urban green spaces is mandatory for local authorities just like it is for traditional ‘hard’ infrastructure. This could help avoid development decisions that create less liveable environments that we will have to live with –and in – forever.

population growth, we must not lose sight of the environmental benefits that urban green space provides, warns the Parliamentary Commissioner for the Environment, Simon Upton

Campaign launched against ‘undemocratic’ RMA reform

Creating Regional Planning Committees to take over local councils’ planning responsibilities will only result in higher building costs, more red tape, no local control and more co-governance, the New Zealand Taxpayers’ Union says

Under the Government’s plan to cut red tape created by the Resource Management Act, which has driven a housing and infrastructure crisis, three new pieces of legislation will be introduced to replace the Act.

The Natural and Built Environment and the Spatial Planning Bills are already in the select committee process, with the committee’s report due 27 June. Submissions

closed 5 February.

Environment Minister David Parker says the two bills will work together to cut red tape, lower costs and shorten the time it takes to approve new homes and key infrastructure projects.

“More than 100 RMA plans will reduce to just 15 regional-level plans across the country. The time taken to prepare them will reduce from 10 years under the current system to a maximum of four years.”

What this means is, like with Three Waters, decision-making powers will be stripped from local councils and centralised. Fifteen co-governed, unaccountable Regional Planning Committees will dictate the planning rules for houses, businesses, farms and the environment. At this rate there won’t be much left for local councils to do.

For taxpayers, the proposed regime is even worse than the RMA. The

legislation’s contradictory objectives and undefined Treaty obligations will open up the new authorities to constant court action. The result is higher costs and more red tape, making it harder for New Zealanders to get things done, meaning we all end up poorer. A petition has been launched by the New Zealand Taxpayers’ Union calling for the new Regional Planning Committees to be scrapped based on the following arguments.

No local control

A democratically elected local council may only have a single representative on a Committee of 20 or more representatives.

For example, decisions on a new housing development in Waitaki may be taken by a Committee in Christchurch where there is only one representative from Waitaki.

Federated Farmers warn that this will “reduce democratic engagement” while Greater Wellington Regional Council argues that “the… Committees have little democratic accountability and risk side-lining regional council functions”.

These Committees must also produce a plan for the whole region that complies with a National Planning Framework dictated by a Minister sitting in the Beehive. A local council can then only grant consents if they adhere to this plan.

Castalia contends that the increase in centralisation will “increase the likelihood of errors”.

Higher building costs

These new rules and plans will give far more grounds to object to the granting of a resource consent.

Consents will also only be granted for 10 years, which Federated Farmers argue is “not long enough to provide investment certainty

for investors to make meaningful decisions”.

Councils are also likely to be even more risk-averse than they are now given the presumption in favour of environmental protection.

The Chief Justice of the Supreme Court also warns that “extensive legislative reform is usually followed by a period in which the meaning and effect of the new legislation is litigated through the courts”. This will likely come with a significant legal bill and result in higher costs of development. This new bureaucracy will have to be paid for by ratepayers, despite councils having next to no control over what these Committees do and no way of opting out.

More red tape

The Committees are required to consider 18 ‘system objectives’ such as affordable housing, reducing greenhouse gas emissions, and promoting a variety of land uses.

The Committees must “actively promote the[se] outcomes” along with four other decisionmaking principles such as “integrated management of the environment”.

The legislation does not prioritise these objectives but rather gives that power to the Minister to decide.

Business NZ argues that having this means that there is “little or no ability to make cost/benefit decisions in terms of trade-

offs between potentially competing, or in some cases even conflicting, system outcomes.”

If the Minister’s prioritisation is unclear, the default requirement is to exercise caution and favour environmental protection over all other factors.

Unconstitutional cogovernance

A minimum of two unelected iwi and hapū representatives will be on each of these Committees, but the composition must be mutually agreed with councils.

A recent Waitangi Tribunal report argued that 50/50 co-governance should be required on these Committees in order to comply with the Treaty.

The new National Māori Entity will put pressure on the new Committees to ensure they abide by Treaty principles. The Entity can also review decisions anyone made by any person or body acting under these new laws, including the Environment Court, which the Supreme Court Chief Justice, Helen Winkelmann, has warned is “inconsistent with New Zealand’s constitutional arrangements”.

The local iwi and hapū can issue statements on Te Oranga o te Taiao – or the natural wellbeing of the environment – to the Committees for which there is no provision for appeal in the new laws. The New

Zealand Initiative warns that such statements are “untested, undefined and unpredictable”.

How will it work in practice?

Building or Adapting

Your Home:

• Central Planning Committees will decide where and how you can build and make changes to your home. These Committees will have to promote 18 competing ‘system outcomes’ that are ill-defined and create complexity. This would likely mean decades of legal challenges before there is any certainty around what you can and cannot do to your own property.

• The National Planning Framework must also comply with the Emissions Reduction Plan, which the Federated Farmers have warned could see the “Committees implementing rules requiring residential buildings to reduce emissions (presumably reduce use of natural gas for heating and cooking).”

• If you don’t like a decision made by these unelected Committees, you won’t be able to vote them out.

Major Projects:

• The New Zealand Taxpayers’ Union believes the proposed laws are vague, complex and often contradictory. Industry-leading organisations have expressed strong concerns that it will become near impossible to undertake any major infrastructure development if these law changes go through.

• The Electricity Sector Environment Group warns that the proposals would mean it would be significantly more difficult to get consent for major renewable energy projects such as wind, hydro and geothermal power and therefore means “consumers would ultimately pay more for power from existing generation sources, as well as higher prices for power from new generation”.

• Decisions will also be taken far away from the communities

they affect. For example, whether a new geothermal power plant in Taupō gets consented will likely be decided by unaccountable bureaucrats in Hamilton.

Environment:

• The New Zealand Taxpayers’ Union thinks the conflicting objectives in the proposals will end up leading to worse environmental outcomes than under the status quo.

• With a law change as significant as this, it is important that it is done well to ensure that it achieves its intended outcomes. The Commissioner for the Environment recommended against rushing the proposals through before the election due to their “failure to ensure that environment outcomes are of primary importance through the addition of a raft of competing additional outcomes.” The Government has said it wants to

proceed anyway.

• The proposed laws lack the ability to efficiently and effectively reduce things like water and air pollution. Kevin Counsell, an expert in environmental economics has warned the Government’s approach “seems likely to make it even more difficult for externalities to be internalised.” Without ensuring that those who pollute bear the cost of doing so, environmental outcomes are likely to get worse.

Businesses:

• These Committees will create 30-year plans to determine where you are allowed to do certain activities. If

land is designated as an area specified for a particular kind of farming, for example, it will be very difficult to change the land use to something else.

• According to Contact Energy, the proposals “simply provide more ammunition than ever before to frustrate and stall, obfuscate and delay critical investment”.

• The New Zealand Taxpayers’ Union thinks that the end result is a New Zealand where it is even more difficult, and expensive, to do business or build quality infrastructure.

Read the full report by the New Zealand Taxpayers’ Union

Shortsightedness and poor planning lead to property buyouts

The failure of successive councils and governments to prepare for inevitable flood events has left ratepayers and taxpayers burdened with bailing out the owners of weather-affected properties

The Government will enter into a funding arrangement with councils in cyclone and flood affected regions to support them to offer a voluntary buyout for owners of Category 3 designated residential properties. It will also co-fund work needed to protect Category 2 designated properties.

Minister of Finance Grant Robertson says the facilitation work that the cyclone taskforce had been engaged in to undertake risk assessments has been completed.

“From here the councils will lead engagement with their affected property-owners. This will help councils get the right solution in the right place and avoid significant financial hardship for property owners.”

For properties designated Category 2 (where it is determined community and/ or property level interventions are feasible to manage future severe weather event risk) the Government will work with councils to help them build flood protection and other resilience measures. The initial support for this is already in place with $100 million initial funding announced in Budget 2023. People in homes designated as Category 3 properties

(where future severe weather event risk cannot be sufficiently mitigated) will be offered a voluntary buyout by councils – the costs of which will be shared

Finance Michael Wood says initial indications are that across all regions there will be about 700 Category 3 properties, and up to 10,000 homes in Category 2 areas.

dented, but they were not unexpected.

Last year, then Associate Minister of Local Government Kieran McAnulty received a report titled Vulnerable Communities Exposed to Flood Hazard.

between the Government and councils.

“The focus of today is on residential properties. We are working with sectors, such as the horticulture sector on possible targeted support for commercial operators, and on regional plans that will provide overall support for recovery and rebuild,” Robertson says.

A parallel process is also underway to engage with Māori, including on appropriate processes for whenua Māori. Engagement with those communities will be led by the Cyclone Response Unit, Te Arawhiti and local councils. The process will ensure that there are equitable outcomes for these communities.

Associate Minister of

Robertson says there is no precedent for the response required, but there will be more events like this in the future.

“As a Government we have to strike a careful fiscal balance between supporting affected communities and not making all taxpayers bear the cost.”

This is a cost that could have been avoided if it were not for decades of underinvestment in infrastructure, poor planning and the shortsightedness of building homes in flood-prone areas without the necessary flood protections.

Proactive, rather than reactive policy is what is needed here. Robertson may call this year’s extreme weather events unprece -

“This report identifies 44 communities that have a high level of socio-economic vulnerability and are exposed to flood hazard, are not planning to build flood protection infrastructure according to council LTPs, and communities in the wider district may have limited financial capacity to fund responses to flood risk,” it says.

“More than half of the vulnerable communities exposed to flood hazard are in the upper half of the North Island.”

This is not a new problem, with the report making reference to the July 2021 flooding of Westport, which revealed the challenging mix of flood hazard and financial limitations the community and councils face.

The report spelled out to the Government that what happened in Westport could happen in the North Island unless action was taken.

That action is at last being taken, but it is too little, too late.

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Values have reduced by an average of 4.5% throughout the first four months of 2023, including an average reduction of 0.6% in the month of April – a marked improvement on the 1.4% average decline recorded back in March. The national average home value is now $902,501, which is 13.3% less than the same time last year, but 22% higher than before the Covid-19 pandemic first began here in late February 2020.

The average rate of home value decline has slowed in 10 of the 16 largest urban areas that QV monitors – including in Auckland, where the rolling three-month rate of reduction has slowed from 5.2% in March, to 4.4% in April. However, it is still the second-largest average home value decline this quarter, after Whangarei (4.6%). Wellington’s average rate of home value decline has also slowed to 3.7% this quarter, down from a 4.8% quarterly decline back in March.

In the South Island, Queenstown was the only one of the country’s main urban centres to record positive home value growth at an average of 2.8% – representing a remarkable turnaround from last month’s quarterly decline of 3.2%. Christchurch (-3.7%) and Dunedin (-3.1%) both recorded notably larger quarterly home value reductions in April than they did back in March (-1.2% and -1.6% respectively), with the former marking its first double-digit annual decline (-10%) in 14 years.

QV national spokesperson Simon Petersen commented: “We’re seeing a mixed bag of results across the country right now, with the residential property downturn slowing in some

Average New Zealand house price back to $900,000

While the residential property downturn looks to be nearing its end in some areas, it is still gaining momentum in others, the latest QV House Price Index shows

centres, yet increasing in others. The market fundamentals have not changed –credit constraints and high interest rates continue to have a stranglehold on the market – but we are starting to see some small signs that it could be approaching equilibrium.

“Though it’s still far too early to say precisely when the downturn will bottom out, the Reserve Bank’s recent proposal to ease mortgage loan-to-value ratio (LVR) restrictions, coupled with additional changes to the treatment of expenditure in application processes, could certainly bring some buyers back into play. Immigration is also continuing to ramp up in the background, fuelling

demand for housing. These things won’t revitalise the real estate market overnight, but they may provide some relief at a time when activity is at historic low levels.”

Mr Petersen said buyers remained scarce, even as new listings fell to historic lows in April. “Investors are sitting on their hands for the most part, potentially biding their time while they wait to see what this year’s election has in store for them – although continued ‘stalling’ of value declines within some of NZ’s larger urban areas may begin to entice some who believe that we are at the ‘bottom of the curve’ back into the market.

“Owner-occupiers are

having to weigh up the considerable challenges and risks of trying to buy and sell in such a difficult market environment. While large numbers of first-home buyers are still being locked out of it altogether due to its unaffordability – the cost of living crisis being a major barrier to saving for a deposit, and then being able to service a mortgage.”

“Meanwhile, the real estate market is continuing on its steady climb back down the mountain of very significant home value growth we saw in 2020 and especially 2021. It’s still a long way off its pre-Covid-19 levels for the most part, but this corrective cycle isn’t over yet – it still looks as though the market is destined for

a difficult winter ahead,” he added.

Auckland

The average home value across Auckland is now 15.4% lower than the same time last year at $1,262,390.

The region’s rolling threemonth rate of reduction slowed from 5.2% in March to 4.4% in April, with five of the Super City’s former territorial authorities also seeing their rates of reduction reduce. Rodney (-4.2%) and North Shore (-3.5%) were the two exceptions, with Manukau (-5%) recording the largest average reduction in home value (a 1.7% improvement on last month’s figure).

Franklin District managed to buck the downward trend entirely this quarter. Its average home value increased by 1.6% to $932,918.

Despite this, local QV valuer Hugh Robson said it was too early to say whether or not the Auckland market was starting to bottom out. “Auckland’s residential property market continues to be very quiet. We’re seeing low sales volumes, quiet open homes, and extended selling periods.”

“In Waitakere and Auckland’s central suburbs, properties are regularly selling at around 10-15% below their rating values. Buyers are generally paying prices similar to the levels seen in May or June 2021. Developers are just focusing on completing their current developments – very few development sales are taking place at the moment.”

Northland

Whangarei has experienced the largest average home value reduction of New Zealand’s main urban centres for the second month running.

The city’s average home

value has gone down by 4.6% to $737,739 in the three months to the end of April 2023 – representing a significant decrease from the 6.6% three-month decline to the end of March. House values are now 13.3% lower on average than they were here one year ago.

Meanwhile, Kaipara District saw an even larger decline in average home value of 8.4% this quarter, with Far North District once again proving to be the most resilient of the north with an average decline of 3.7% throughout the three months to the end of April.

Tauranga

Tauranga’s average rate of house value decline slowed by 0.8% this quarter.

In the three months to the end of April, home values slipped back 3.7% to $1,015,458 – representing a smaller quarterly decline than the 4.5% recorded back in March. Annually, home values are now 14.9% less on average than they were one year ago.

QV property consultant Derek Turnwald commented: “Open home attendance is starting to drop off even more now as we move into the cooler months of the year. Auction attendance remains poor overall, and consequently so are auction outcomes. But properties with maintenance issues or unconsented work are still the most difficult to sell right now.”

However, Mr Turnwald said there were signs that the market’s current “corrective cycle” could be starting to come to an end – including the Reserve Bank’s proposal to relax LVR restrictions, indications that its next Official Cash Rate review could see only a small percentage increase

or none at all, increasing migration, and a decreasing supply of new homes coming onto the market.

Waikato

Hamilton’s quarterly rate of home value decline slowed in April.

The city’s average home value reduced by 3.9% to $776,203 in the three months to the end of April 2023 – an improvement on the 5.2% decline recorded over the three months to the end of March. Home values are now 13.3% lower on average than the same time last year, following a relatively strong April that saw values all-but hold even at just a 0.1% decline for the month.

Local QV property consultant Marshall Wu said market sentiment remains relatively downbeat, with no sign of interest rates easing in the near future and the cost of living still increasing. “Agents are reporting longer selling periods with fewer buyers in the market. Sales volumes are significantly lower than 12 months ago, which is understandable given the major shift in market sentiment and conditions. However, easing LVR restrictions will likely benefit first-home buyers.”

Meanwhile, home values have fallen away by an average of 2.9% across the wider Waikato region this quarter. The latest QV House Price Index shows the largest reductions were in Hauraki District (-6.7%) and Waikato District (-4.1%). Otorohanga has largely managed to buck this downward trend, with its average home value still sitting 6.5% higher than the same time last year.

“Regional markets continue to slow down due to the same factors and market conditions that

Hamilton and the rest of New Zealand have been experiencing for the last 12 months. All districts in the Waikato region have seen a decrease in median house prices over the past six months, but there are positive signs that Waikato property prices may have started to stabilise in recent months.”

Rotorua

Is the real estate market finally starting to bottom out in Rotorua?

“There are some strong fundamentals which are beginning to indicate that the current corrective cycle of the residential property market could be coming to an end,” said QV property consultant Derek Turnwald. For one thing, Rotorua’s average home value actually increased by 1.6% to $642,546 in April, compared to an average decline of 0.6% nationally last month. It was enough to improve the city’s rolling threemonth rate of decline from 5.7% in March to 3.6% in April.

Mr Turnwald said other signs the current cycle could be coming to an end include the Reserve Bank’s proposal to relax LVR restrictions and indications that its next Official Cash Rate review could see only a small percentage increase or none at all.

“New Zealand is currently experiencing a net migration boom, we still have a tight labour market with strong job security, and the supply of new houses is declining. A lack of commitment from buyers could be partly attributable to it being an election year, so after October there will be more certainty and therefore it’s likely we’ll see more property transactions around that time too.”

Taranaki

Home values in the Taranaki region are on average 2.2% lower than they were at the start of this year, which is less than half the national average (-4.5%).

In New Plymouth, the rolling three-month average rate of home value decline increased from 1.5% in March to 1.7% in April. The average home value is now $714,267, which is 5.8% lower than the same time last year.

In the neighbouring districts of Stratford and South Taranaki home values have reduced by an average of 5.6% and 2.2% respectively this quarter.

Hawke’s Bay

The downturn has picked up a small amount of momentum this quarter in Napier and Hastings.

Napier’s rolling threemonth average rate of home value decline increased from 3.8% in March to 4.2% in April. In neighbouring Hastings, the rate of decline increased from 2% in March to 2.3% in April. Annually, home values are now 17.2% and 13.8% lower in Napier and Hastings respectively.

QV Hawke’s Bay manager Damian Hall commented: “Activity is fairly quiet across the board. First home buyers appear to be gradually entering the market again. There is some evidence of investors getting out, potentially due to the pressure of increased interest rates. We are starting to see some flood money enter the market too, particularly in the upper quartile. This doesn’t seem to be impacting prices but merely helping clear out existing stock.”

Meanwhile, values continued to drop across the wider Hawke’s Bay region this

quarter at an average rate of 3.6%. Annually, home values are down the most on average in Central Hawke’s Bay District (-20.6%), with Wairoa District still showing a small but statistically significant amount of growth (0.3%).

Palmerston North

The average rate of home value decline slowed in Palmerston North this quarter.

The city’s average home value is now $628,461, which is 14.4% lower than the same time last year. It reduced by 2% during the April quarter, which is an improvement on the 2.7% quarterly rate of decline reported in last month’s QV House Price Index.

Local QV registered valuer Olivia Betts commented: “We continue to see a leveling out within the market. Though demand for residential property remains subdued generally and the number of sale transactions is low.”

“Generally lower-valued properties in Palmerston North are still showing negative movements, while the higher-valued properties are remaining fairly solid at their current levels,” she added.

Wellington

The downturn slowed this quarter in Wellington.

The latest QV House Price Index shows home values reduced across the region by an average of 3.7% throughout the April quarter – still a faster rate than the national average (-3.5%) but well down on the 4.8% average decline for the March quarter. The average home value is now $838,158.

The largest declines this quarter occurred in Porirua (-6.6%), Kapiti Coast

District (-5.1%), and Wellington City (-3.4%), despite the latter showing a small but statistically significant amount of home value growth during the month of April (0.2%).

Local QV senior consultant Blake Ngarimu commented: “Although the market has continued to see a decline in values over the first few months of 2023, the stats are showing signs that we may be nearing the bottom.

“Over the month of April the average value in Wellington City has remained relatively stable with a slight increase of 0.2%, values in Lower Hutt decreased by 0.2%, and they decreased by 0.6% in Upper Hutt. Porirua experienced the largest decline of 2.6%, but otherwise it was a relatively stronger month for the region’s housing market.”

He said most active buyers in recent months tended to be first-home buyers. “It’s likely that large numbers of investors will be looking to hold off until after the general election.”

Nelson

Nelson’s average rate of home value decline slowed last month – but it remains a difficult market for buyers and sellers.

The city’s average home value fell another 1.8% this quarter to $787,531, but allbut broke even in April itself (-0.1%). It’s an improvement on the 2.3% decline reported for the March quarter, with the annual average rate of decline now sitting just under double digits at 9.4%.

QV Nelson/Marlborough manager Craig Russell said market activity remained subdued with modest levels of properties transacting.

“Conditional contracts

remain the order of the day with a number of in-chain sales with purchasers often being conditional on the sale of their own property.”

“We are seeing a clear oversupply of properties in the $900,000 to $1,500,000 bracket in Richmond. Properties that are not being priced to meet the market are becoming stale and tend to result in asking price reductions,” Mr Russell said.

“Investor activity remains low given the high interest rate environment. Softening property values and tax changes are making it difficult for these investments to stack up financially. But we have seen increased activity in the $500,000 to $700,000 price bracket over the past month. With the First Home Grant price caps in the process of being adjusted, we may start to see more activity in this price bracket in the coming months.”

West Coast

The downturn picked up a small amount of momentum this quarter on the West Coast.

Home values have fallen across the region by an average of 2.2% during the April quarter – down from the 1.7% average decline we reported last month for the March quarter.

However, values have reduced by just 3.4% on average since the same time last year, compared to a national average annual decline of 13.3%. Buller (-5.7%) leads the annual decline for the region, with Grey (-2.2%) and Westland (-2.5%) experiencing less than half as much negative home value growth.

Canterbury

Christchurch’s annual rate of home value decline has

hit double figures for the first time in more than a decade.

The latest QV House Price Index shows the average home value has fallen across the Garden City by precisely 10% since the end of April last year to reach $721,460. It’s the city’s first double-digit annual decline since the 12 months to the end of February in 2009, which encompassed much of the 2008 Global Financial Crisis.

The latest figures show Christchurch’s average rate of home value decline increased from 0.5% in March to 2.8% in April, with the city’s three-month rolling average also increasing from an average decline of 1.2% to 3.7%.

Local QV registered valuer Olivia Brownie commented: “While New Zealand as a whole has seen a slow in value decline, the same cannot be said for Christchurch or for the wider region. We’re slightly behind the rest of the country in terms of the current property cycle, with house values holding up better locally throughout much of last year than they did elsewhere.

“Buyers appear non-committal and prices are being

dropped, especially on properties that aren’t necessarily meeting good criteria. Nevertheless, we are seeing the first signals that we have reached interest rates peaks now, and other factors such as an increase in net migration means we may see the property market reach an equilibrium in the greater Christchurch area after a cool winter.”

Meanwhile, home values are on average 8.2% less across the wider Canterbury region that they were at the same time last year, including a 2.9% average reduction this quarter. Besides Christchurch, the largest average reduction this quarter occurred in Selwyn (-2.8%).

“We note that most Canterbury districts have seen a 12-month decline in house values now, with the exception of Ashburton, Mackenzie and Waimate,” Miss Brownie added.

Dunedin

Dunedin’s average rate of home value decline increased in April.

The latest figures show the city’s average home value went down by 2.2% in April to $619,622, compared to a 0.4% average reduction in March. Annually, home

values are now 11.3% lower than they were at the end of April last year.

Local QV registered valuer Rebecca Johnston said supply continued to exceed demand. “With so much choice and so few active buyers, properties requiring any maintenance, repairs and upgrades are being viewed less favourably, often requiring extended marketing periods and vendors having to lower their expectations.”

“Investors are continuing to take a back seat for the most part, feeling the pinch of higher interest rates. Some have consolidated their portfolios, offloading debt to ease some pressure by reducing sale prices to achieve quicker sales. Off-plan townhouses continue to be their preferred investment choice, with no Brightline Test applicable to new builds, as well as mortgage interest deductibility compared to existing builds.”

Queenstown

Queenstown’s average home value went in the opposite direction to almost everywhere else this quarter.

Buoyed by a big April, the tourist town has recorded

2.8% average home value growth for the most recent quarter. Its average home value is now $1,736,877, which is 5.3% higher than the same time last year, compared to an average annual decrease of 13.3% nationally.

Local QV registered valuer Greg Simpson commented: “Property market conditions are currently subject to high potential for change and market uncertainty. We note that there is currently reduced sales volumes locally and fluctuating but still generally positive value growth for residential property.”

“Selling prices in Queenstown Lakes District are well above other districts. This is likely to continue given the recovery of the tourism industry and the general shortage of housing in the main centres of Queenstown and Wanaka.”

Invercargill

The latest QV House Price Index shows home values actually increased in Invercargill for the first time in six months.

Invercargill’s average home value was $455,098 at the end of April, which is a 0.6% improvement on QV’s March figure – but still 3.7% lower for the quarter, and 8.2% down on what it was one year ago.

Local registered valuer Andrew Ronald commented: “There is still much less demand now compared to early 2022 and a greater number of properties on the market. This is particularly evident for entry-level housing where there are now limited investors as a result of continued interest rate increases and changes to tax deductibility rules.”

More mortgage enquiries after LVR rise

The Reserve Bank’s easing of LVR restrictions is already seeing more first-home buyers making enquiries with banks and brokers, says Tim Kearins, Owner of Century 21 New Zealand

As of 1 June, loan-tovalue ratio (LVR) limits on lending to owner-occupier borrowers with less than a 20 percent deposit have been loosened and property investors are allowed to have a lower deposit.

The looser restrictions mean the previous 10% limit for loans with an LVR above 80% for owner occupiers, and 5% limit for loans with an LVR above 60% for

investors has lifted to a 15% limit for loans with an LVR above 80% for owner occupiers, and 5% limit for loans with an LVR above 65% for investors.

This provides banks, brokers, and importantly, borrowers a little more wriggle room. Anecdotally, we are hearing that lenders are getting more enquiries. The Reserve Bank was right in its assessment that the previous limits, which

were put in place at the height of the pandemic, were now too tight and may be blocking creditworthy borrowers from borrowing. Nonetheless, borrowing remains tough.

The arrival of Credit Contract & Consumer Finance Act (CCCFA) saw a serious credit crunch from late 2020. Despite some Government tweaking since, big retail banks continue to conduct ultra-conservative

assessments on all new borrowers.

Mortgage brokers have come into their own in the past couple of years and are playing a key role in 2023 getting more Kiwis into homeownership.

If prospective property buyers can stump up a deposit and prove their ability to service a mortgage, they might be surprised with what a mortgage broker can offer. To help their cause, new borrowers should also consider getting in a flatmate or boarder. That income could make all the difference in getting them over the line. The latest easing of the LVRs is another boost to prospective borrowers.

Also encouraging is the fact that, while the property market has fallen about 17% since the peak in late 2021, the rate of decline is reportedly slowing. Further, in its monetary policy statement last month, the Reserve Bank said house prices had fallen to a more sustainable level.

REINZ recently reported that real estate agents across the country are seeing glimpses of green shoots in the market as first-home buyers show more interest after the Reserve Bank’s announced on the easing of LVR restrictions.

Let us not forget that rents are still high, and for many, if they can organise a mortgage and buy this winter, they won’t look back. As well as softer prices, Century 21 agents are reporting that vendors are finally getting more realistic. Many vendors are also keen to sell before the General Election campaign, which sees buyers delaying their decisions.

What Now for Yields as Peak in OCR is Signalled

Having raised the cash rate at the most aggressive pace in its history, the Reserve Bank of New Zealand (RBNZ) has signalled that it has reached the top of the cycle. This will encourage the view that property yields have also reached their cyclical peak, further movement, albeit limited, however, may be expected over the short term.

The return of inflation ends the period of low interest rates

The GFC that began in 2008 prompted central banks in Western economies to slash interest rates as a means to bolster their struggling economies. Over the following years, economic performance gradually improved, but interest rates remained at historically low levels.

However, when the Covid-19 pandemic hit, governments and central banks around the world swiftly implemented emergency measures to support their economies. One of these measures included aggressive interest rate cuts, driving them to record lows in numerous nations.

As economies cautiously reopened, a new challenge emerged: surging inflation. This inflationary trend has been attributed to various factors, such as disruptions in global supply chains, shortages of essential workers, and a surge in consumer spending coined as ‘revenge spending’. Consequently, central banks found themselves compelled to increase interest rates. This move aimed to curb excessive demand within the economy and work towards restoring

Have yields peaked with OCR raises?

The Reserve Bank of New Zealand has signalled an end to further rises in the Official Cash Rate (OCR) – Colliers explores what this could mean for property investors

inflation to target levels set by policymakers.

New Zealand First to Start, First to Finish?

The RBNZ took swift and aggressive action as New Zealand was amongst the first countries to combat rising inflation by increasing interest rates. Starting from the Covid-19 induced emergency level of 0.25%, rates were lifted in October 2021, and at each of the subsequent 11 Monetary Policy announcements.

However, the RBNZ has indicated that the current OCR rate of 5.5% will likely be the peak of this cycle, and they anticipate initiating rate cuts in the third quarter of 2024. This

announcement surprised experts who expected the recent surge in migration to fuel demand, contribute to inflation, and require further rate hikes.

In contrast, the RBNZ asserts that inflation has already peaked and will continue to ease. Although government investment is predicted to grow, the overall fiscal policy is expected to be contractionary. The RBNZ believes that demand in the economy is softening, citing a slowdown in consumer spending and an easing of residential construction activity. Furthermore, they foresee migration levels gradually returning to pre-Covid-19 trends in the coming quar-

ters.

Property Values to Stabilise After Wild Ride

Property owners will welcome the Reserve Bank’s signal that the (OCR) has reached its peak, considering the significant impact that the rapidly rising rates have had on capital values. Over the period from early 2020 to late 2021, the value of assets, including commercial and industrial properties, surged primarily fueled by historically low borrowing costs.

The subsequent rapid increase in the OCR, however, has led to higher financing costs, causing a recalibration of yields resulting

in a partial reversal of the capital gains previously generated.

The best illustration of the movement in yields is provided by the Auckland industrial market, given the relatively high number of sales. In December 2019, average yields for Auckland industrial properties stood at 5.3%, falling, by the end of 2021, to 4.1%. By March 2023, however average yields had risen to 5.6%. While yield movement varied across sectors and locations, the overall trend remained consistent.

Data released by MSCI reveals the impact of this cycle on property values. Average annual capital gains for all commercial and industrial properties peaked at 14.5% in the year ending September 2021. However, over the year to March 2023, average capital values declined by 6.3%.

Value variations across sectors also depend on rental trends, which mirror current demand dynamics.

In this respect the industrial property sector has been the strongest performer, with an extended period of tight market conditions resulting in significant rental growth over the past two years. This growth has mitigated the impact of rising yields on property values.

Rental growth has also been apparent within the prime grade sub-sector of the office market, driven by increased demand for high-quality office spaces as employees have returned to workplaces in increasing numbers. Conversely, the secondary office sector faces further downward rental pressure as vacancy rates increase.

The retail subsectors have displayed mixed fortunes, with strongly performing malls and large format

centres experiencing mild rental increases. However, strip retail assets face challenges, as weaker demand has made it increasingly difficult for landlords to maintain rental levels.

Peak Yields in Sight

While the Reserve Bank has signalled the peak in interest rates, further upward

adjustments to property yields may occur over the next few months. This is a result of property valuations lagging the movement in interest rates due to sufficient numbers of sales taking place as well as reporting lags and therefore it takes time for the full extent of changes to crystalise.

While, for many sectors,

the risk premium between property yields and fixed interest rate alternatives sit at below longer-term norms, much of the adjustment has seemingly been made indicating that under current expectations of the peak in the OCR, peak yields are not far away.

Positive sentiment in CBD office markets

In its Vertical Vacancy Review for Q1 2023, JLL explores the trends among occupiers and forecasts in rental growth and sustainability requirements in the CBD office markets across Auckland, Wellington, and Christchurch

Throughout 2023, we are likely to see a further realignment of yield levels as investors adapt to the reset of funding costs, with an ongoing preference for prime assets over those with a high proportion of vacancy, higher risk occupiers, low seismic rating (especially in Wellington), or with larger capital investment requirements.

We forecast rental growth

will continue for quality properties that have good tenants and covenants across all cities. Vacancy in these properties is expected to decrease as well, continuing the trend of divergence between prime and secondary grades. Occupiers are continuing to work with their employees to collaborate on the ‘new normal’, and as a result, wellbeing is front of mind for those seeking appropriate, flexible

working environments. In addition, with the employment market expecting to remain constrained, corporates will look to provide quality workplaces to attract and retain top people. The importance of embodied carbon in existing corporate real estate will remain topical, as the growing trend to demolish and rebuild may not be the most sustainable choice for the environment

in development project.

In addition to the social aspect of ESG (environmental, social and governance), stakeholder conversations are becoming more prevalent in the boardrooms, and local regulators are implementing environmental guidelines for building standards such as Green Star and NABERS (National Australian Built Environment Ratings System).

Cities at a glance

Auckland – Vacancy in both premium and A-grade buildings continues to decrease, with vacancy decreasing across both Core CBD and Wynyard Quarter.

Wellington – Significant activity in the capital sees four developments completed, another two undergoing seismic strengthening, and a further four under construction.

Christchurch –The Garden City has experienced very few changes since the latter half of last year and remains stable with increased investor interest in this region, with one new prime CBD office due to be completed in Q3 2023.

Auckland CBD

• Since JLL’s 3Q22 Vertical Vacancy Review, prime premium and A-grade) vacancies within Auckland’s CBD decreased by 166 bps to 8.1% (from 9.7%). This represents an uptake of an additional 9,200sqm of space. Importantly, 10 out of the 26 buildings in the precinct have 0% vacancy.

• The vacancy trend for this period has been positive for the five premium towers showing a decrease of 307 bps, from 5.9% to 2.8%, illustrating an uptake of an additional 4,888sqm of space. This supports the current sentiment of increasing demand for high quality office space, especially

assets located near the waterfront.

• Vacancy in A-grade buildings also decreased, down 113 bps to 11.0% (from 12.1%), an uptake of 5,173sqm of space. This was mostly made up of floors leased at 41 Shortland Street and 23 Customs Street East.

properties are currently at 14.6%, equivalent to ~1.75 months rent-free. These are expected to decrease to 10.4% (~1.25 months rentfree) by 2024, given occupier demand for new prime space.

• There are three office buildings currently under construction

Auckland

-Wynyard Quarter

• Prime vacancy within Auckland’s Wynyard Quarter decreased by 97 bps to 3.1% (from 4.1%), representing an uptake of 2,465sqm of space since our last review in the second half of 2022.

• Buildings that experienced a large decrease in vacancy included 22 Viaduct Harbour Avenue and 34 Sale Street, while 151 Victoria Street experienced a slight increase in vacancy.

• Significant moves include Ricoh taking up a full floor at 34 Sale Street, and Visa moving into 22 Viaduct Harbour Avenue to take up ~3,500sqm of office space.

• This quarter saw the decision by Auckland Council to make a few floors available for sublease at 20 Viaduct Harbour Avenue and at 167-191 Victoria Street West. However these changes were offset by some spaces at 46 Sale Street and 109 Fanshawe Street being leased. In total, sublease space decreased from 11,122sqm to 10,683sqm.

• Average net prime rents increased by $10psm during 1Q23, from $548psm to $558psm. The upper end of net rents for premium buildings, the highest recorded rent for Auckland office buildings, now stands at over $850psm.

• Incentives for prime

in the CBD, which are expected to add 53,000sqm by 2025. When completed, we forecast an increase in vacancies in properties on the border of A grade and upper end of B grade assets, as more and more organisations compete to secure prime offices.

• Precinct’s Wynyard Quarter Innovation Project includes three buildings – 117 Pakenham Street (8,700sqm), 124 Halsey Street (9,700sqm), and 126 Halsey Street (The Flowers Building). Beca will lease 14,000sqm across five floors within this development,

expected to complete by 2025. Floorplates will comprise around 2,900sqm each.

• Wellington prime office vacancy increased by 474

bps, from 2.6% to 7.3%, representing 18,114sqm of additional space available. The majority of this vacancy increase is in two properties, being the Asteron Centre and Maritime Tower. We are aware of deals underway which will

have a positive impact on vacancies.

• Average gross rents for prime buildings increased by $5psm during 1Q23, now at $640psm. This represents a 2.8% year-on-year increase, expected to increase by a further $5psm

per annum over the coming years due to the demand for seismically strengthened office space in the capital’s CBD.

• Rents for new builds are currently registering significant increases – 3.8% quarter-on-quarter and 9.4% year-onyear. They currently stand at $760psm and are expected to peak in 2025 at ~$805psm, after which the increases are expected to stabilise.

• Despite the increase in overall vacancy, 19 out of the 25 buildings in Wellington were recorded at 0% vacancy. This is mainly due to limited additions to supply in recent years and ongoing government office requirements.

• Developments underway include 2-12 Aitken Street (preleased to Archives New Zealand), 61 Molesworth Street (pre-leased to the Ministry of Foreign Affairs and Trade), 48 Mulgrave Street, and 161 Victoria Street (two of three floors have been pre-leased to Meridian Energy and Tonkin & Taylor).

• Sublease availability increased by 190 bps to 2.6% (from 0.7%), mainly due to several floors being made available for sublease at 157 Lambton Quay.

• Two buildings commenced refurbishment and seismic strengthening: 23 Kate Sheppard Place and 33 Customhouse Quay. 55 Featherston

Street completed its refurbishment, with the Internal Revenue Department leasing most floors in this building.

• The Willis Bond development at 15 Customhouse Quay is leased to Bell Gully, JLL, Servcorp, and the Eye Institute. Precinct’s 40 Bowen Street is leased to Ernst and Young, Fujitsu, Simpson Grierson, Dentons, Aspect Furniture, and restaurants Little Astoria and Nam, with Generator occupying the first two floors.

Christchurch

• Christchurch prime office vacancy decreased by 226 bps to 1.7% (from

4.0%), representing an uptake of ~2,552sqm of space, demonstrating the high demand for prime office space in this tight office market.

• The city’s reduction in vacancy was a result of two buildings: 47 Hereford Street, where vacancy dropped from 37% to 22%, and 62 Worcester Boulevard, where vacancy dropped from 20% to 0%.

• The Garden City has 76% of its A-grade office buildings standing at 0% vacancy. Sublease space has remained unchanged at 2,529sqm. Continuing the trend of the CBDs in this report, there is limited space available for sublease

in Christchurch, apart from a full floor in 215 Tuam Street and a partial floor at 60 Cashel Street.

• After increasing at the end of last year by 4.2%, average net prime CBD rents remained unchanged during 1Q23 at $375psm. Rents are forecast to increase by 4.0% during 2023, supported by limited new stock coming to market and continued low vacancy in the Garden City for prime CBD office space.

• Asking rents for new builds are expected to be around $425psm to be attractive to both developers and investors, as construction costs have increased over the last few years.

• The only officeexclusive prime new build in the CBD in the pipeline is 224 Cashel Street, named

the Huadu Innovation Zone. This is a 14,000sqm building with seven floors of office space that has been undergoing a full refurbishment and seismic strengthening and is expected to be completed in the third quarter of this year.

JLL (NYSE: JLL) is a leading professional services firm that specialises in real estate and investment management. JLL creates opportunities, spaces and sustainable real estate solutions for its clients, people and communities. JLL is a Fortune 500 company with annual revenue of $20.9 billion, operations in over 80 countries and a global workforce of more than 103,000 as of December 31, 2022. For further information, visit jll.nz

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Their arrival on New Zealand work sites has completely changed the way project management is planned and the way on-

site work is completed in a safer and faster manner.

They load material, pick it up, drive to where it’s needed and then unload. The rotating telehandler can then pick the load, rotate and place the materials where needed.

The concept originated in Europe, where the majority of urban construction sites are very compact and do not allow room for traditional telehandlers.

“Rotating telehandlers have taken North Ameri-

ca by storm and over the past 18 months have been attracting a lot of attention in New Zealand,” says APS general manager Darren Boon, agents for Magni, one of the most technologically advanced brands of rotating telehandlers in the world.

“As technology has improved so has the reach and lifting capacity of these

type of machines. On a multi-level construction site, a machine with a five-tonne lift and 26-metre reach would usually have been the standard,” says Boon.

“Now machines are available for bigger projects with heavy lift capability up to 13 tonnes and machines with a reach of 51 metres.”

The world’s highest rotating telehandler – RTH6.51 (six-ton lift) has an impressive 51-metre reach (not pictured)

Magni recognised early that the biggest trend in the industry is to lift safer, higher and heavier

MAGNI ROTATING TELEHANDLERS - EFFICIENCY

Proven efficiency

Replacing a tower crane with a rotating telehandler.

An Auckland private building company has purchased a Magni rotating telehandler in favour of hiring a tower crane for the construction of a four storey apartment block in West Auckland. The rotating telehandler meets most of their lifting requirements for the crane work, with a larger mobile crane only being bought in to lift the heavy pre-cast panels. Having the ability

to easily swap attachments between winch and a set of forks the machine can pick and carry around the building site for more efficient lifting or the unloading of trucks. All deliveries from the building supplier can be ordered on flat-deck trucks which means quicker delivers and savings of up to $150 per delivery by not waiting for Hiab/crane truck to become available.

MAGNI ROTATING TELEHANDLERS - SAFETY

The Load Movement Indicator (LMI) system is a load limit device. It is fitted as standard on all Magni telescopic handlers (RTH, TH and HTH ranges). It is made up of a rotation sensor, stabiliser cable reel, lifting cylinder pressure sensors and the LMI safety control board. Together, these components provide the operator with the best real-time load chart. This system continuously analyses the spatial positioning of the load and stores specific load charts for each attachment, displaying the correct load chart based on the machine’s working configuration.

The LMI system constantly monitors the movements of the machine to avoid any type of overload. If the system detects operating inconsistencies, it interrupts all aggravating movements, allowing only safe maneuvers (boom retraction and load release). This prevents operator error causing serious injury to themselves and nearby staff.

Every telehandler is equipped with the R.F.ID automatic attachment recognition system on the boom head. Whenever a new attachment is fitted to the machine it is recognised automatically and the display shows the corresponding load chart.

The safety of the operator and people nearby is paramount

Over half of NZ workers exposed to carcinogens

Findings from a recent WorkSafe report may shed light on why cancer and respiratory diseases contribute to 70% of all work-related deaths in New Zealand

WorkSafe, in collaboration with the Occupational Integrated Database Exposure Assessment System (OccIDEAS) team and Research New Zealand, conducted the New Zealand Carcinogens Survey to estimate the current exposure to carcinogens among New Zealand workers.

Carcinogens are agents that, according to research, are known or likely to cause

cancer in humans.

The recently published survey report found that:

• Over half (57.5%) of workers are probably exposed to at least one carcinogen at any level

• 3% are probably exposed to five or more carcinogens at any level

• Over half (53.1%) of workers are exposed to at least one

carcinogenic agent at a low level

• Nearly three in ten (28%) workers are probably exposed to at least one carcinogen at a high level.

In New Zealand, carcinogens and airborne substances are probably associated with one-third of work-related harms. Cancer and respiratory diseases contribute to 70% of all work-related deaths.

Under the Health and Safety at Work Act 2015 (HSWA), businesses have a responsibility to protect workers from this exposure.

Findings from the survey will support the Government Health and Safety at Work Strategy 2018–2028 and WorkSafe’s carcinogens and airborne risks programme.

View the full report

W i t h y o u r s u p p o r t w e c a n c o n t i n u e t o p r o v i d e p ra c t i c a l h e l p , c a r e a n d c o m f o r t .

A c c o m m o d a t i o n a n d h o m e v i s i t s a r e j u s t t w o o f t h e w a y s w e s u p p o r t N e w Z e a l a n d e r s a f f e c t e d b y c a n c e r.

First aid obligations as a contractor

A contractor’s work environment must be safe for everyone involved, which means having the proper first aid supplies and personnel in an emergency

This article will discuss some essential tips and strategies for contractors to help them meet their first-aid obligations.

Evaluate Your First Aid Needs

When it comes to health and safety on a job site, evaluating your first aid needs is the first step contractors should take. Taking the time to assess what kind of hazards may be present in any given work environment can help inform decisions about the type of first aid supplies and kits needed to keep workers safe and healthy.

The best way to do this is by checking the materials used, determining which jobs require special first aid training, and assessing the number of workers who may be working at any given time.

For instance, contractors who work with dangerous chemicals or other hazardous materials need access to emergency medical treatments like oxygen tanks and chemical suits.

Choose the Right Supplies and Personnel

Selecting the right

supplies and personnel is essential when planning and meeting your first aid obligations. Choosing the right supplies will ensure that you have all the necessary items in an emergency while selecting the right personnel will ensure that they are adequately trained to handle a medical situation.

When selecting your first aid supplies, you should ensure that you have enough of each type to treat any potential injuries. First aid kits should include bandages, dressings, antiseptics, scissors, tweezers, adhesive tape, gloves, and eye protection.

You should also consider

purchasing specialized supplies such as splints and stretchers if needed by staff members or visitors to your premises. Additionally, many workplaces are now investing in automated external defibrillators (AEDs), which can help save lives during cardiac emergencies.

Train Employees in First Aid Procedures

Training employees in first aid procedures is a critical step contractors should take to ensure they meet their obligations in providing adequate medical attention when necessary. While it may seem costly

or time-consuming, the benefits of equipping workers with the knowledge and skills to respond quickly in an emergency can help save lives and prevent severe injuries.

First aid training teaches people how to act in a medical emergency and ensures that advanced medical care is sought immediately. It equips employees with the skills to assess and respond to any type of injury or illness, including cardiac arrest, choking, strokes, heat exhaustion, snake bites, and more.

For example, if an employee falls off scaffolding or experiences any other serious injury, trained personnel onsite can help stabilize them until they get advanced medical care. Access to first aid materials such as bandages and splints can also be helpful if someone sustains minor injuries on the job site.

Create an Emergency Action Plan

Contractors should not forget the importance of creating an emergency action plan (EAP) when planning and meeting their first aid obligations. An EAP helps to ensure the safety of employees, customers, and visitors by providing clear instructions on how to respond in the event of an accident or medical emergency.

A comprehensive EAP should include detailed instructions for responders; these instructions should address critical areas such as:

• who will take charge and provide overall supervision in the event of an emergency

• who will initiate phone calls for help

• how vital medical information will be communicated

• how evacuations will be managed

• what personal protective gear (PPE) must be worn

• what type of transportation may be used

Finally, all personnel must be aware of the EAP

recording each incident and injury can provide invaluable insight into how to prevent similar situations in the future.

In addition, having a comprehensive record of all reported incidents helps contractors keep track of their progress toward meeting their first aid obligations.

Make Sure You Have Enough Supplies On Hand

before working at a job site to adequately prepare themselves in advance. Furthermore, periodic drills should be conducted to ensure that everyone involved understands their role and responsibilities in case of an actual incident.

Keep a Log of All Accidents & Injuries

When meeting first aid obligations, there is no better way than to keep a detailed log of all incidents and injuries. This method helps contractors plan effectively and ensure they meet the standards set out by their health and safety regulations. In addition,

This means they can more easily identify areas where the action is needed, such as additional training for workers or special equipment purchases. Furthermore, logging incidents can help them demonstrate compliance with health and safety standards if external audits are conducted.

Moreover, logging injuries is essential in providing appropriate care to injured employees or visitors onsite. Keeping detailed records of what happened can help ensure proper treatment is given accurately and timely. It also allows for a followup to be carried out when necessary and for other preventative measures to be implemented before further similar incidents occur.

Having a sufficient supply of first aid products ensures that any injuries or illnesses that occur can be treated quickly and effectively. This helps minimize the risk of further problems arising from inadequate treatment, such as infection or delayed recovery time.

In addition, contractors should have a comprehensive list of all the items they need to keep in stock to prepare them for an emergency. In particular, they should always have a range of personal protective equipment (PPE) such as gloves, masks, and goggles available to protect workers from potential hazards.

It is also essential for contractors to regularly check these supplies and replace them when needed. Doing this helps prevent employees from being exposed to expired or damaged products, which could pose additional risks if used inappropriately or incorrectly.

Conclusion

Meeting first aid obligations is an essential part of any contractor’s job. Proper planning and preparation can ensure that all personnel are aware of their roles, ensure sufficient supplies are available to treat injuries or illnesses quickly, and keep a record of incidents and injuries for future reference.

Following these steps will help protect workers and visitors on site and demonstrate compliance with health and safety regulations.

medshop.com.au

Industry leader in soft fall protection on construction sites

Massey University rigorously tested all elements of the Safety Nets NZ system

With the enactment of the Health and Safety at Work Act (2015) it became apparent that there was a need to assure customers that they comply the requirements of the Act in safety measures for fall arrest.

“We needed to have our system independently analysed, engineered and ultimately certified. This meant that not only did the individual components of the safety net fall arrest sys-

tem have to be tested, the performance of the safety fall arrest system as a whole also needed to be studied,” says General Manager Craig Daly.

A team at the School of Engineering and Technology at Massey University tested a variety of drop heights and weights, different bracket centres, various net sizes and points where the load strikes the net.

“It even tested nets of different ages and repaired

nets, with the results being collated and analysed to effectively confirm that our safety fall arrest system works,” says Daly.

“This enables PCBU’s to discharge their responsibilities in regard to the requirements of the in the use of a system that is without risk to the health and safety of it’s workforce.”

When the nets have been installed and inspected by a Safety Nets NZ team and a handover certificate

completed by our certified rigger, the client can then commence works above the safe area of the net.

“All of our safety documentation has been produced in such a format as to ensure that it complements the overall site safety policy and manual that the Principal Contractor is required to establish on all projects,” says Daly.

Click here to read inspection guidelines

Ensuring adequate respiratory protection

Worksafe NZ's Clean Air programme was their first targeted intervention on workrelated health. Their goal was to reduce the risk of respiratory ill-health caused by exposure to airborne contaminants in the workplace.

A key part of the programme is to raise awareness and eliminate or control the health risks of silica dust, organic solvents, welding fumes, wood dust, carbon monoxide and agrichemicals.

In New Zealand cancers and respiratory diseases from airborne substances account for at least 31% of total work-related harm and

an estimated 650 deaths per year. They account for 79% of the estimated 750 – 900 people who die annually from work-related health causes - Source: Worksafe NZ. More information here: https://www.worksafe.govt. nz/topic-and-industry/ work-relatedhealth/ carcinogens-and-airbornerisks/

Whether you are an employer who needs respiratory solutions for employees or a welder, plumber, spray painter, asbestos worker, farmer or even a casual carpenter – LUNG PROTECTION IS VITAL!

It is incumbent on PCBU’s

to ensure that workers are not exposed to carcinogens and airborne risks. When the hierarchy of controls in risk management have been applied and risks remain, Respiratory Protection Equipment is one of the last lines of defence.

Choosing the correct type of respiratory equipment can be quite confusing, but here are a few simple guidelines to ensure that employers and workplaces make the right decision.

• Get advice from experts.

• Use a reputable supplier.

• Ensure the respiratory equipment complies with AS/NZS1716:2012.

• Use the right filters or opt for an airline system if

necessary.

• Change filters regularly.

• Only use the filters supplied by the manufacturer of the respiratory mask to stay compliant.

• Get “fit tested”.

pH7 has the expertise and products to assist companies with their respiratory requirements. Follow pH7’s respiratory “fast facts” articles on LinkedIn, Facebook and Instagram for more insights.

For end to end solutions, contact us on 0800 323 223, email us at enquiries@ ph7.co.nz or go to www.pH7.co.nz

It is incumbent on PCBU’s to ensure that workers are not exposed to carcinogens and airborne risks

How to attract, retain and support good staff

How has the Certification industry been disrupted by the Covid environment and what have we done to combat the changes

Ayear ago I wrote an article on this very same topic. At that time New Zealanders, and in particular those of us up in the Northern part of the North Island, had just come out of an extended period of restrictions.

Little did we know that we would return from the Xmas break and be pushed back into another series of restrictions.

As the year unfolded New Zealand finally threw open the doors and allowed both its people and international visitors to start the process of travelling freely up and down country again.

By the time this all came into being we had all spent more than 2 years managing Covid through an initial eliminate strategy, and ultimately a learning to live with the virus world

In the previous article I focussed on the core operational levers that we had been required to review and amend to allow our business to operate and effectively survive.

Now a year later all of the changes we had determined to make are either locked in or in the throes of being locked in.

The sticking point

There is one area that continues to be a significant struggle for all businesses throughout New Zealand, and we at Telarc are not isolated from it. This area is the way in which we attract, retain and support people in a post Covid world.

We are a normal business by New Zealand standards. We employ just under 50 people. We have workers

based from Auckland in the north down to Dunedin in the south. We have clients on Stewart Island all the way to Kaitaia in the north.

Five years ago the business employed predominantly European males with an average age of late 50’s to mid-60’s.

Covid’s arrival saw a number of those employees retire. When seeking to replace the retiring wave we had in front of us we found ourselves increasingly looking at and employing really good candidates from offshore.

So when you look at our business today it is a completely different demographic.

Half of the current team identify as NZ European. We now find ourselves with the balance of the team being born and educated in

places such as Iran, Pakistan, South Africa, Zimbabwe, India, Korea, UAE, Croatia, Germany, Canada, Fiji, the UK and Australia.

Encouragingly as we have on-boarded these people the male/female split is now lifted to 60/40. And our remuneration is based on role and competence within the role as well as performance.

Real world experience

Where have the workers gone? The change is not something we had planned for. What we discovered as we looked to replace our ageing workforce was that there weren’t many New Zealanders with the experience and qualifications we needed who were looking for work.

You may ask why? The challenge we have is that we need people with real world experience. We audit predominantly infrastructure management, manufacturing and construction companies. The building of those entities took place, in a good proportion of cases, many years ago.

As we, in New Zealand, have automated processes and downsized traditional operational training grounds for new talent coming into the industries sectors mentioned earlier we have seen the pool of “could be” auditors diminish.

On the other hand, in the countries I mentioned earlier, from whom we are sourcing qualified people, we are able to access people who have been involved in, or supported, the development and management of large-scale infrastructure projects. This is both in their own countries as well as within the regions they

have resided in / travelled to.

By having the experience they do, and also having been exposed to management system auditing, they arrive really well qualified to support the growing certification market that New Zealand is experiencing.

We still find the odd diamond in New Zealand who brings the work experience we need to the job. In most cases, though, the people who do successfully come to us do have a number of years of experience in a variety of operational roles.

This leads to our having to jointly invest between 9 and 12 months to be trained, and supported, to be confident when they start their stand-alone auditing journey. We continue to support and on-board local people, but as I have said the journey to being confident is a long one.

The other aspect to weigh into this equation relates to “where have all the New Zealand workers gone”. We hear all sorts of reasons including – early retirement, overseas experience (delayed or just the right time for it), moved to another country for higher pay or lifestyle, became a real estate agent or property developer pre-2022.

The list of reasons is getting longer and, to be honest, it is not something we can influence change in overnight. It is what it is and as a result we solve for today’s problems with the most suitable resource we can find. And on the whole the best qualified come to us from offshore.

New approaches needed

With the on-boarding of people from all over the

globe we have found ourselves facing dilemma’s that we wouldn’t have predicted in a pre-Covid world.

A good example of one of the challenges we face is dealing with spoken and written English. For a number of the people who have joined us English is the second, or third and even sometimes fourth language of choice for them.

So things that would normally be taken for granted, such as writing or defining orally a concisely worded observations or recommendation, can initially be a struggle for some of the new people we have employed.

Add into this the idiosyncrasies that make New Zealand business, and social banter, challenging for new arrivals results in both our clients and our new auditors ending up being a little frustrated in finding com-

mon understanding.

We recently ran a structured approach towards better understanding some of the dilemma’s auditor’s face when getting out into their first “stand alone” engagements.

One of the biggest insights related to keeping the onsite auditing engagement calm. When managing an audit the last thing the auditor wants is for the audit to turn into a “voices raised” and “defensive” engagement. Finding ways to put all parties at ease is a skill. And when achieved allows the engagement to proceed with minimal flare ups or disruptions.

Even for New Zealand born and raised auditors, out on their first “stand alone” audits, keeping the engagement calm is challenging.

They come to the engagement understanding

Telarc is a Jas-anz Accredited Certification Body which provides qualified, competent, New Zealand auditors, who are industry coded to provide relevant and impartial intervention for a large range of New Zealand business regardless of the business size.

The body is able to provide New Zealand business with an individual or a team of auditors capable of assessing one or multiple standards across one or multiple sites.

While the key priority of any commercial relationship is to deliver a product or a service, there is an increasing need from businesses to have confidence that their tendering parties and suppliers are managing their business in a manner that won’t negatively impact the supply relationship.

There are increasing demands from buyers for their suppliers to provide confidence that they are operating their business in a manner that is delivering good quality and environmentally

aware products (ISO 9001 and ISO 14001) while managing workers in a way that protects worker well-being and safety (ISO 45001).

There is more demand across other areas such as ethical work practices, Asset Management (ISO 55001) and IT Management (ISO 27001).

Accredited Certification looks for gaps, risks and improvements in the way that work is actually done versus the way it is planned and communicated.

This provides visibility of where work practice and or documentation anomalies lie in all levels of the business. This then leads to improvement activity so Certification can be granted.

The second growing area that is driving minimisation of risk through Certification is through board and senior leader directives.

Over the last decade, legislation and regulations have looked to push culpability for sub-optimal work practices towards senior leaders and boards.

the idiosyncrasies of New Zealand and its language. So when a recent arrival to New Zealand who is operating with English as a 2nd or 3rd language is trying to i.) Interpret the spoken word while, ii.) trying to keep the client calm and engaged, the world can turn messy very quickly.

I haven’t even touched on the writing of reports in this overview as this then creates the next downstream challenge for the new arrivals.

For those of you reading the article you probably are thinking why bother, if it is going to create all the frustrations alluded to above?

Enthusiasm for the job

What we have found is the people we are hiring from off shore are intelligent, motivated, qualified, “keen as” workers who want to live in a country where they can safely raise their family while working hard.

When I was growing up, the qualities I see in the people moving here is what differentiated New Zealand from other countries and made our people successful all over the world.

To that end increasingly we are going to become more reliant on workers coming from countries around the globe. Understanding their culture and their difficulties when integrating into the New Zealand way is going to be a challenge we will have to solve for.

The above is one example of the challenges we are facing in a post-Covid world. There are a number of others, but for this exercise I think it is better to focus on one area to highlight the changes we will all have to deal with over the

next few decades.

Goodbye good old Kiwi business

Once an organisation accepts that the days of being the “good old kiwi business” are gone and that the new world order requires a very open, culturally diverse mind-set the overarching people management ethos changes, significantly.

The key is to embrace the change and find ways to adjust our mind-set to remain successful, rather than fighting it.

Which is a nice segue into the final point of this overview.

The greatest challenge post Covid is mind-set. Trying to bring back the past, trying to replicate what we want and trying to carry out work in a way that was successful before is not going to be easy.

Mind-sets need to change and need to adjust to a new world order in which the globe is becoming a huge resourcing opportunity, and that we should get the best people we can before someone else does.

Risk comes in many forms and

certification

helps over a variety of levels

Philip Cryer is CEO of Telarc, a Crown Entity subsidiary with a vision to provide its clients with end to end, impartially audited

Company failures leave builder in wheelchair

Two construction companies have been held accountable for a cavalier attitude toward keeping people safe when working at height

The lack of planning and implementation of safety measures from both companies left a builder with life-changing injuries after they fell three metres from an unguarded second floor void on a construction site in September 2020, including a broken spine causing paralysis. The victim can no longer work as a builder as a result of their injuries and now requires a wheelchair to move.

Court in March with a final decision on fine amounts and reparations delivered on 28 April.

Background

• Chunda Limited and JMK Homes Limited were both sentenced at the North Shore District Court on 9 March 2023, with the final decision delivered on 28 April 2023.

• A fine of $258,918.92 was imposed and reparations of $61,464.20 were ordered for Chunda Limited and a fine of $175,000 was imposed for JMK Homes Limited, and reparations of $46,386.20 ordered.

• Both companies were charged under sections 36(1)(a) and 48(1) and (2)(c) of the Health and Safety at Work Act 2015.

• Being a PCBU, having a duty to ensure, so far as is reasonably practicable, the health and safety of workers who work for the PCBU while the workers are at work in the business or undertaking, including while undertaking construction work did fail to comply with that duty, and that failure exposed workers to a risk of death or serious injury caused by falling from height.

• The maximum penalty is a fine not exceeding $1.5 million.

“The injuries the victim suffered were entirely preventable if controls, including edge protection had been in place to address the risks of a fall from height. They are inexpensive, easy to obtain, and easy to set up,” says WorkSafe’s area investigation manager, Danielle Henry.

It was confirmed to WorkSafe this only happened after the incident. This is an indictment on the business and further underlines how avoidable this injury was.”

Chunda Limited had a worrying history around protecting its workers, and WorkSafe had taken a number of enforcement actions against the company since 2017 to influence the company to do better. This included seven prohibition notices, two sustained compliance letters, one directive letter, and two improvement notices.

“WorkSafe had a number of interactions with Chunda Limited, and they were on notice to up their game and keep workers safe. This included providing them with guidance and information related to risk management. This is why this incident is, in our eyes, unforgiveable and inexcusable given the track record,” says Danielle Henry.

Read WorkSafe’s guidance on working at height

The employer, Chunda Limited, and the property developer, JMK Homes Limited, were sentenced at the North Shore District

“This was demonstrated in the immediate aftermath of the incident when edge protection was installed by workers using construction materials available on site.

The great unlearning

Safety News and AsiaPacific Infrastucture publisher Mike Bishara accepts an invitation from Optimum Training to join a four-hour safety training session

Iharboured a fervent hope that 25 years of development and refinement of Wayne Milicich’s injury prevention model might contain a few surprises.

The prospect of four hours in what I suspected could be a moralising lecture about how to lift a box was not enthralling. I could see, as we shuffled into the training centre, that the rest of the class felt the same, with a range of resigned, bored and cynical faces.

We were wrong. Boy, were we wrong. Participants soon learned “it was all about them” and their individual quality of life. And how 30 seconds after the training would break the harmful muscle memory that had taken over the way we did things.

“The programme is about unlearning what we learned between the ages of about eight to 13 years old and restoring all the movement patterns that we learned naturally during the first five to eight years of our life,” says Milicich.

For example, children all demonstrate best balance, unlike most adults. About 80 percent of the adult population “half breathe” from the apical area of the lungs as opposed to the diaphragm and lower lobes of the lungs, according to Milicich. “Children all naturally breathe from their belly, diaphragm, unless they are stressed.”

The most hardened cynics in our group quickly became engaged in the programme through a series of

practical truths, illustrated by a range of interactions, sometimes with a workmate.

We emerged half a working day later wondering who to sue for the preventable harm I have inflicted by following instructions. Life quality did not require lifetime dedication, just a reordering of basic instincts and tossing out a few myths. For our group, the quality of life had become anchored forever around balance and the 70/30 weight split between heels and toes.

We were converts to breathing out like weightlifters, sticking out our butts and letting tummies and abdominals do their thing - we discarded posture misinformation and stress and replaced it with comfort, a safe and secure back and no pain.

Optimum’s programme is of suggested solutions, not imperatives. “When we do this training, it is to benefit the individual. The company

clips the ticket and gets a benefit only when the individual benefits.”

“You cannot stand on a platform and tell people they are wrong. When a person’s belief is challenged, they will do anything to defend that truth as it is what they believe and know and have lived by. The only way to expose the false belief is to lead someone to find the truth for themselves.

In most cases following instilled poor habits is akin to

tapping yourself lightly on the head with a hammer for years. Do it enough times and you will end up permanently damaged.

You cannot separate work safety and whanau safety – they are two sides of the same coin, according to Milicich. Health and safety at home and work are just a component of our life quality. Not something that is separated out with its own rules to be applied at specific times and locations.

To a person, we emerged

70/30 balance is at the core of a quality of life

Optimum Training manager Dwane Stewart with an eager team of learners

ready to retrain our misguided muscle memory with the 30-secondsa-day-worth of drills to reprogramme our muscle memory that had taken us just four hours to master.

“The training empowers people to work out the truth for themselves and trust themselves. You are the only person who can determine what works best for you. Trust yourself to make a good call,” says Milicich. With no pen, paper or tables in the room, this programme is “pure adult facilitation of kinesthetic learning followed by cognitive understanding. It is simple to restore what was once in the muscle memory when we were five to eight years old. The original neural pathways just open up again,” he says. We learned and now retain what we learned.

“Stress is recognized as a major cause of MSD and auto-immune disease. We help people understand how their body manifests stress and equip them with the understanding and tools to manage themselves during stressful times,” says Milicich.

Optimum’s facilitation process has four specific steps. When applied correctly to the session, most often the learner has no idea of what

has happened, but they do recognise that their life has changed for the better.

Our session began with participation exercises which showed the overriding importance of balance.

The 70/30 rationale was enough to consign to the bin, along with a flurry of other medical myths, the long-held and totally wrong “bend your knees and keep your back straight” doctrine.

It soon became apparent why Optimum’s quality of life programme is used by many of the country’s most astute corporations in an age where time “off the floor” is critical to the bottom line and many companies look only to tick the boxes of compliance.

The benefits are equally cost effective, available and absorbed by SMEs. My class had only nine other participants so having a cast of thousands is not essential – or even recommended.

“Move Smart Think Smart is about addressing the underlying causes of muscle and joint pain that occur as we interact with inert objects both at work and at home. Home injuries affect the workplace. Workplace injuries affect the home and family,” says Milicich.

“Either way the quality

of life of a person is compromised. The traditional medical model calls the problem ‘nonspecific back pain and occupational overuse’. In fact, the pain is about inadvertent personal misuse of the body -- it is very specific.”

The bio-medical model reckons back pain is normal. “No, it is not normal,” says Milicich. “It is common, and the medical model is unwittingly part of the problem.

“Good posture” is nothing more than an old wives’ tale based on the military model of control and it is still believed today. A teacher tells children to sit up straight as a means of controlling the class. It is now portrayed as good posture.

“The medical field is littered with information and advice that was eventually proven wrong and retracted. Some of our western cultural beliefs are based in nothing more than decades or centuries old beliefs and mores.

The sad thing is that more than 80 percent of MSD's are inadvertently and unwittingly self-inflicted. People hurt themselves as they interact with inert objects, and they don't even realise it, says Milicich.

“The only way a box can hurt someone is if it is flying

through the air and strikes them. Or if it is moving on a conveyor and they put their hand where they should not.

A spade and the ground are both inert. To suffer pain while digging a hole is the person hurting themselves as they interact with the spade and ground.

The pain is a direct result of poor skills and technique of movement -- self-inflicted pain.

Most people blame something or someone for this self-inflicted injury. At that point, only the symptom can be addressed with drugs and therapy.

The problem returns as they repeat their old thinking and poor technique once the symptom has eased.

“No one deliberately hurts themselves. Given the opportunity, everyone makes the right choice,” says Milicich.

To a person, everyone was engaged for the full duration of training, always relevant, interesting, practical and beneficial to each person. We felt equipped and empowered to take back responsibility for ourselves. I personally still muse over and apply the learnings. My years of knee pain has gone.

30-second daily drills to re-programme muscle memory

The perfect combination of quality assurance, high stock levels and expertise

Bastion’s comprehensive range of barrier protection solutions are trusted widely by industry professionals throughout Australasia.

It’s a level of trust that has been achieved through consistent delivery of quality assurance over almost two decades in the industry.

When it comes to choosing suppliers, Bastion has a strict selection policy. They only work with internationally certified suppliers who

have strict quality control measures in place. For extra assurance Bastion regularly monitor their manufacturers’ production facilities and test quality control procedures through a third-party auditor.

Choosing the right suppliers is top of mind for Bastion, as it means

consistently delivering on their promise to protect New Zealanders with excellent quality product that is fit for purpose.

High stock levels & Specialist Team

Bastion is committed to maintaining high stock levels. With an extensive and well-resourced logistics

channel and strong supplier relationships, they are well positioned to keep customers stocked throughout the current global supply chain disruptions.

With just under twenty years of experience, Bastion are barrier protection specialists. Their experienced team provide expert support to help customers select products that are fit for purpose, fit correctly and are suited to specific industry applications.

Bastion Pacific NZ is a kiwi owned family business. Providing disposable barrier protection solutions, janitorial products and safety gloves to businesses throughout New Zealand and Australia.

If you’re not sure about a product, why not order a free sample?

Reach out to the Bastion team at enquiries@ bastionpacific.co.nz.

No better investment than chemical safety training

Now is the time to schedule your customised Responsible Care NZ Competent Chemical Handler course, conveniently delivered on your own site

Changes to our Global Harmonisation System (GHS) chemical regime applying from 30 April 2021 require accurate and timely advice - non-compliance could prove costly.

Competent staff avoid expensive and sometimes confusing compliance advice, while enabling an effective response to chemical incidents, often without requiring emergency services.

Inspectors and certifiers with years of expertise warn of a declining national workplace chemical safety performance.

A crucial factor is the continuing loss of onsite chemical safety advice, primarily due to replacing flawed but effective mandatory Approved Handlers with whatever employers now deem sufficient.

A second major chemical incident in the same public facility is a timely reminder that safe chemical management is not receiving the attention it deserves. Competent staff are essential.

Onsite Responsible Care

NZ (RCNZ) Competent Chemical Handler Certification courses are tailored to reflect your chemical inventory and enable compliance.

Upskill the last of your HSNO Approved Handlers, update Certified

Handler requirements and successfully implement the updated Global Harmonisation System (GHS).

For struggling, noncompliant business operators who are attracting attention from enforcement agencies, practical onsite advice from Competent Chemical Handlers helps lessen the load on a diminishing number of Compliance Certifiers. It helps to ensure site chemical safety measures remain effective.

RCNZ Competent Chemical Handlers (CCH) are increasingly in demand, resulting from our popular ‘Walk and Talk’ site visit to assess actual chemical management performance, identifying the need for specialist training, throughout the product life cycle.

Chemical incidents now guarantee media attention, often sensationalising the incident by highlighting persons adversely affected by unwanted exposure to chemicals.

This can irretrievably damage reputations to both customers and suppliers, particularly if employers have not taken all practicable steps to safely manage their chemical inventory throughout their operations.

When chemicals do cause problems, employees, customers, WorkSafe

Essential compliance tools

Ensuring staff are competent to safely manage the harmful chemicals essential to your business includes your effective response to a chemical incident.

To enable a smooth, cost-effective transition to and beyond compliance, you need compliance tools:

- the updated RCNZ industry Codes of Practice reflecting our revised GHS chemical management system

- your 24/7 CHEMCALL® emergency response subscription; and the all-important ‘how to’ advice arising from our popular site ‘walk and talk’ assessments - replacing your Approved Handler with our Competent Chemical Handler certification

These are all cost-effective measures which add value to your business.

Talk to us today about compliance tools, which confirm you are a good employer, committed to safeguarding employees and our environment by safely managing your chemical inventory.

Responsible Care NZ

04 499 4311

www.responsiblecarenz.com

inspectors, local authorities, health protection officers and emergency response organisations all benefit from the expertise and product safety information available 24/7 from 0800 CHEMCALL®, our industry’s unique, subscription based chemical emergency advisory service.

Supported by thousands of compliant Safety Data

Sheets (SDS) combined with their collective industry expertise and local knowledge, CHEMCALL® responders provide callers with comprehensive advice about how to safely manage the incident, safeguarding people and often avoiding business disruption.

No matter where your business travel takes you, you can live as local as you like. Want to find an award-winning flat white? How about the best restaurant to charm clients in town? Because we’re local, we can point you towards the very best.

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