Property & Build: Election 2023

Election 2023: what it means for housing and construction

ELECTION 2023

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Site Safe New Zealand launch VR training courses for New Zealand’s construction industry Health and safety training for New Zealand’s construction industry has levelled up with the launch of Site Safe’s first virtual reality (VR) training courses.

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ELECTION 2023

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ELECTION 2023

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he discussion and debate of different views are a healthy part of democracy, so when some views are not represented in parliament, this can give rise to unrest and division. Last year’s month-long protest outside parliament may be a sign of things to come unless there is reform to our electoral system.

Of the 2,886,427 votes cast in the 2020 election, 225,190 of those went to parties which failed to meet the 5% threshold to get into parliament. That is more than the entire population of Wellington City without a party to represent them in the Beehive.

The Independent Electoral Review is set to put forward a package of recommendations to the Government in November. In its interim report, one of those recommendations is to lower the party vote threshold to 3.5% from the 5% threshold which was set when New Zealand’s population was much smaller.

“Lowering the threshold will broaden representation by allowing more minor parties into parliament, while still allowing for the formation of stable parliaments and effective governments,” the review panel says.

However, a 3.5% threshold would not have made a material difference in the last election, so perhaps there is an argument to take this proposal further and lower it more substantially, or abolish the threshold altogether.

Either way, more people will vote for their favoured party if there is a higher chance of them getting into parliament, giving us greater representation and a more democratic parliament.

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Is our electoral system undemocratic In the last election, more than 200,000 New Zealanders’ votes did not count toward the final result – an independent review is expected to call for changes which will give more people a voice in parliament In conjunction with this, the review also recommends abolishing the one-electorate seat threshold.

“Currently, a party that wins an electorate is entitled to its share of list seats as well, even if it did not meet the party vote threshold. We have concluded that this gives voters in some electorates more say than voters in other electorates about which parties get represented in parliament,” the panel says.

It also speaks about overhang seats, where if a party wins more electorate seats than its share of the party vote would otherwise have entitled it to.

“When this happens, that

party keeps all the electorate seats it has won, but the number of list seats allocated to other parties is increased until the next election. This keeps parliament in proportion to the party vote. We recommend removing these extra seats for other parties. Instead, fewer list seats should be allocated. We only recommend this change in conjunction with removing the one-electorate seat threshold so as to limit the number of overhang seats.

“We [also]propose fixing the ratio of electorate and list seats at 60:40 with an additional proviso that the size of parliament should always be uneven to avoid hung parliaments. The ef-

fect of this recommendation would be that parliament would increase gradually in size over time in proportion to changes in our population.”

The review also makes recommendations around funding, including a cap of $30,000 on private donations and $500 on anonymous donations.

“We [also]recommend that only individuals on the electoral roll should be able to loan or donate to parties and candidates. All entities, whether trusts, companies, trade unions, iwi, hapū, or unincorporated societies should be prohibited from providing funding.”

Read the full report

ELECTION 2023

Contents 2

Site Safe New Zealand launch VR training courses for New Zealand’s construction industry

4 6 8 10

Is our electoral system undemocratic

15 16 18 19

Kiwi innovation leading the way in concrete slab insulation

60

20

Foreign buyer housing policy grabs attention of offshore billionaires

62

22 24

National’s new housing strategy ‘a mixed bag’

25

Shortsightedness and poor planning lead to property buyouts

26

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

30

Safer, faster, multi-purpose telehandlers

32

How will new energy standards affect Australia’s building sector?

34

A collaborative way forward for infrastructure & construction

36

Construction partnership aims to accelerate growth sector-wide

38 40 42

How BIM Will Impact Your Future Infrastructure Projects

44

Physical threats & abuse widespread in construction

45 46

Industry leader in soft fall protection on construction sites

48

Ensuring adequate respiratory protection

50

No better investment than chemical safety training

52

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

Rental stock reaching crisis levels

54

The great unlearning

Development activity falling as headwinds intensify

56

How to attract, retain and support good staff

Reserve Bank taking ‘wait and see’ approach Commercial property insights Q2 2023 House prices up for first time since downturn

Would a land value tax incentivise housing growth

Chemical safety relies on meaningful cooperation

Hard work gets results

New Zealand cities losing their leaves

Editor Michael Curreen +64 21 029 20234

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Administration Manager Anita Feria +64 27 444 1573

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ELECTION 2023

Reserve Bank taking ‘wait and see’ approach The Reserve Bank of New Zealand (RBNZ) leaving the official cash rate (OCR) unchanged at 5.5% will have surprised very few people, but it has hinted at when interest rates might start to fall, CoreLogic Chief Economist Kelvin Davidson observes

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he decision itself and the associated forecasts as part of its full Monetary Policy Statement had a distinct sense of ‘we’ve been here before’ – with the anticipated tracks for GDP growth (subdued), unemployment (edging upwards), and inflation (slowly falling) largely unchanged from last time the RBNZ published their full forecasts on 24th May. They did slightly push back the timing for the potential first cut in the OCR from later in 2024 to potentially early 2025, but there wasn’t a clear sense that any further increases would be likely in the meantime.

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Indeed, the change to the OCR track seemed to just reflect a technical tweak, around where they think the underlying level of the ‘neutral’ OCR now sits.

Meanwhile, the RBNZ’s view remains that the house price downturn is essentially now over, but also that the ‘upturn’ could be pretty subdued – with prices potentially still below their previous (2021) peak in late 2026. We share those general expectations, with our caution about the next phase for the housing market stemming from the fact that affordability remains stretched, mortgage rates aren’t likely to drop much

for another six to nine months at least, and there’s also potential caps on debt to income ratios looming in early 2024 as well.

Of course, it does also need to be acknowledged that many economic variables have moved quicker than anticipated in this new post-COVID world, and the combination of low new listings flows each week but rising sales volumes means the level of housing stock on the market is declining. This could potentially trigger some more abrupt competitive price pressures amongst buyers than we’re currently anticipating, although in turn this would

tend to bring forward more listings and mitigate some heat for prices.

Overall, this OCR decision may come and go uneventfully, with the focus now returning to each piece of important data as it comes in. The implications for the housing market are also pretty neutral, but those with an existing mortgage due to be repriced from an older/lower rate up to current levels in the coming month or two will certainly be pleased to see the likelihood of a stable OCR for the next little while at least.

ELECTION 2023

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ELECTION 2023

Commercial property insights Q2 2023 JLL explores what is happening across New Zealand’s biggest cities in the office, retail and industrial and logistics markets Office The gulf between prime and secondary office space for lease continues to widen as tenants and employers seek properties that are better equipped to attract and retain the best talent in the market.

Furthering this narrative, net prime rents in Auckland’s CBD office market increased by $8 per square metre in Q2 of 2023 – up a total of $18 per square metre through H1. Vacancies slightly increased in the Auckland CBD Core sector despite the desire from occupiers to take up better, more future-fit offices, however net rents are still forecast to climb in the coming years. In fact, over the next five years, prime office rent in Auckland’s CBD are expected to rise by 12.1%, while secondary office rent will only rise by 6.7%.

The Archives Building at 2-13 Aitken Street

and the new home of the Ministry of Foreign Affairs at 61 Molesworth Street are among notable developments in Wellington’s office market, both pre-leased and due to be completed in 2026 and 2025 respectively. The MFAT office will add more than 24,000sqm of 6-star Green Star and 5-star NABERS office space to the

market.

The already tight office market in the Garden City continued through Q2 of 2023 with a reduction in office vacancy from 3.5% to 2.1%. Over 5,000 square metres of office space was added to Christchurch’s market in the past quarter – a clear indicator of strong performance when combined with the lower

vacancies in the city.

Average net rents and yields slightly softened across most markets.

many small-scale retailers have moved away from expanding in physical

spaces to grow their businesses. On the other end of the scale, luxury

retailers are taking up prime sites over 200 square metres, particularly in the

Read the full report

Retail Following the shift to more online platforms due to the pandemic, 8

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ELECTION 2023 CBDs. As a result, the upper end of luxury spaces in Auckland has been pushing over $5,500 per square metre, while in the suburbs, it’s edging closer to $1,000 per square metre.

In the capital, following the decrease in average net prime rents at the beginning of 2022, performance has remained steady. Signalling the performance of the sector in Wellington, vacancy in the city significantly decreased in Q2 2023, down 1.5% to 6.7%, driven by a rise in leasing activity on Willis Street and Cuba Street.

Bulk retail continues to build on its strong performance from 2022, where it finished with rent growth in Q4 up 7.69%.

Minimal space is in the pipeline in Auckland CBD aside from some smaller

retail components in mixeduse developments, due to complete in 2023.

In the Garden City, average net prime CBD rents have increased significantly through H1 of 2023, up $75 per square metre in the last quarter to stand at $625

per square metre. This performance is expected to continue, driving prime rents in the CBD to $845 per square metre by 2027.

The development pipeline in Christchurch remains strong following the addition of 5,500 square metres of retail space in

Q2 2023, with over 3,500 square metres due to be completed by 2024.

key southern industrial corridor, on top of the over 200,000 square metres that has been added to the market already in H1 2023.

The pipeline in Christchurch is also strong, and more than 60,000 square metres was added in Q2 2023.

By contrast, Wellington’s

pipeline is limited, with only two significant developments underway that will add around 17,500sqm. The consistently tight market in the capital will enhance demand for new spaces further.

Read the full report

Industrial & Logistics There has been a slight shift in the recent trends in the industrial sector across Auckland, Wellington, and Christchurch, with vacancies slightly up and rents largely unchanged.

However, in Auckland City industrial, rents increased by 4.3% to have risen 17.9% over the year to Q2 2023.

Secondary rents for the same sector increased 15.0% over the same time period.

In Wellington, rents remained unchanged for the fifth consecutive quarter, however vacancies increased by 0.3% (to 1.8%) for the second quarter in a row. The competitiveness of the industrial sector continues due to consistent occupier demand exceeding new available stock due to higher construction costs and softening yields. All of these factors point to the

ongoing strength in the market for well-located, quality stock.

That is driving the development pipeline in the industrial sector as well, despite rising construction costs. Over 370,000 square metres is due to be delivered in the

Read the full report propertyandbuild.com

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ELECTION 2023

House prices up for first time since downturn A modest amount of home value growth this quarter may mean the residential property market recovery has begun, QV reports

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he average home increased in value nationally by 0.5% to $893,639, marking its first quarter of positive growth since the downturn began in late 2021. But values continue to track downward across most of the main urban areas, with just Tauranga (0.6%), Marlborough (0.2%), Christchurch (0.1%), Queenstown (0.8%), and Invercargill (1.5%) in the black this quarter.

The latest QV House Price Index shows the rolling three-monthly rate of reduction has slowed in Auckland (-0.5%), Wellington (-0.6%) and Palmerston North (-0.3%), and increased by less than a percentage point in Whangārei 10 propertyandbuild.com

(-2%), Hamilton (-0.7%), Rotorua (-1.4%), New Plymouth (-0.1%), Napier (-1.6%), Hastings (-2.5%), and Dunedin (-1.7%).

Quotable Value (QV) operations manager James Wilson commented: “If we step back and take a good look at the housing market at a high level, things are beginning to look a little healthier now. For the first time in a while we are seeing value increases in some areas of Aotearoa – especially in places where there is strong demand for entry level housing.”

“Generally speaking, it’s a case of the more affordable end propping up the market overall, with areas coming off low value bases

continuing to be among the strongest performers. The obvious exceptions among the main urban areas we monitor are Tauranga and Queenstown, but in both of these places values at the lower end of the market are growing while values at the upper end are still soft.”

Though sales volumes have increased from month to month, new listing numbers continue to soften overall. “Real estate agencies are beginning to report growing interest for a reduced number of new properties coming onto the market, with buyers having to compete for the best ones. This is pushing up values once again,” Mr Wilson said.

“It seems market confidence is increasing, but the upcoming election has also encouraged many buyers and sellers to adopt more of a ‘wait and see’ mindset. It’s also important to remember that strong economic headwinds are still blowing, with many households still re-fixing their mortgages at significantly higher interest rates. It’s likely this will continue to restrict investors in particular.”

Now, as all eyes look toward next month’s general election, Mr Wilson said the housing market would continue to vary considerably from region to region.

“While values begin to strengthen in some areas, the rate of growth is not

ELECTION 2023 expected to bounce back at a significant rate. More likely, we’ll continue to witness flat or gently rising value levels in many areas, while other areas continue to bottom out.”

“We’ll have a clearer view of what’s next for the housing market after 14 October.

By that time, we’ll also have some indication of whether or not we’ll see the usual spring surge in listings that we typically experience around this time of year,” he added.

where vendors have realistic price expectations.”

the downturn began in late 2021. Rodney saw a small decline in average home

Auckland August was a stronger month for the Super City’s residential property market.

value of 0.1% last month, with all other districts experiencing modest amounts of home value growth.

However, home values are

Auckland’s average home value increased by 0.7% to $1,252,282 in August – its first monthly increase since

still 0.5% less on average this quarter than last, and 9.5% lower on average than the same time last year.

Northland Residential property values have continued to decline this quarter in Northland.

Home values went down across the region by an average of 2.3% throughout the winter months of June, July and August. The largest average reduction over this period was in Kaipara (-5.6%), with Whangārei (-2%) and Far North District (-1.3%) faring considerably better.

It’s a marked improvement on the 4.6% quarterly reduction in last month’s QV House Price Index, but values remain on average 9.9% lower throughout the region than at the same time last year.

Whangārei-based registered valuer Renee Pilkington said the local market was still relatively quiet. “Many vendors and purchasers are potentially awaiting the results of the election before making the decision to purchase or sell.”

“New listings coming on the market have slowed and there is now less selection of property amongst buyers. Those properties that are well presented in sought-after locations are selling well, particularly

Local QV valuer Hugh Robson commented: “There has been a moderate increase in the volume of sales and fewer properties listed for sale, which means there’s currently a shortage of stock on the market.

Hopefully the normal ‘spring surge’ in listings will restore some equilibrium to this situation.”

In the meantime, he said first-home buyers remained the most active group in the market. “There has been a slight increase in activity from owner-occupiers, and agents are reporting some increased activity from investors, but first-home buyers are the main group looking and buying right now.”

“The North Shore, Papakura, and Manukau are the areas that have shown the most value movement in recent times,” he added.

Tauranga Tauranga has posted a modest quarterly home value gain.

The latest QV House Price Index shows the city’s average home value increased throughout the August quarter by 0.6% to $1,010,049. But that figure is still 8.1% less than at the same time last year, including 6.2% lower than at the start of 2023.

QV property consultant Derek Turnwald commented: “Tauranga has experienced a quarterly increase in residential values for the first time in well over a year, with the average residential value rising to above $1,000,000 again.

“First-home buyers remain the most active group in the market despite high interest rates and tight lending conditions. There is even the beginnings of FOMO amongst first-home buyers propertyandbuild.com 11

ELECTION 2023

now, with a shift toward more of a seller’s market becoming evident.”

Waikato Home values have continued to reduce across the Waikato region at an average rate of 1.5% this quarter.

But the latest QV House Price Index for August 2023 shows some small pockets of positive home value growth in Matamata Piako District (1.1%), Waipa (0.7%), South Waikato District (0.3%), and in Taupō (0.4%).

In the region’s most populous centre, Hamilton, the average home value has decreased by 0.7% this quarter to $773,179 – down from the 0.1% quarterly gain recorded in last month’s index, and 9.6% less overall than the same time last year.

QV property consultant Marshall Wu said there had been a slight increase in the number of sales locally.

“While the recovery trend 12 propertyandbuild.com

has become evident as we are heading into spring, the outlook for housing values remains uncertain due to expectations of higher interest rates and weakened economic conditions

Rotorua.

The latest QV figures show that home values have reduced by an average of 1.4% throughout the three winter months of June, July and August. The average

are representative of a market that is still experiencing subdued demand. However, agents have been reporting increased demand for appraisals and improved attendance at open homes.”

“Properties in the lower to mid value range which are not well presented or have maintenance or consent issues are not experiencing such large discounts in sale price as they were earlier in the year, as there is now greater demand from firsthome buyers,” he added.

Taranaki

generally.”

Rotorua Residential property values have experienced a small decline this quarter in

home value locally is now $632,647, which is 10.7% lower than it was 12 months ago.

QV property consultant Derek Turnwald commented: “The stats for Rotorua

Residential property values all but broke even in New Plymouth this quarter.

According to the latest QV House Price Index data, the average home value reduced by just 0.1% to $706,336. That figure is 3.9% less than it was 12 months ago.

Meanwhile, in the neighbouring districts of Stratford and South Taranaki,

ELECTION 2023 average home values are 6.4% and 5.8% lower than they were 12 months ago respectively.

Hawke’s Bay Residential property values have yet to hit rock bottom in the Hawke’s Bay region.

The latest QV House Price Index shows that the average home value decreased in Napier by 1.6% to $730,652 this quarter, and by 2.5% to $754,317 in Hastings. This is slightly down on last month’s quarterly reductions of 1.4% and 1.9% respectively.

Meanwhile, Wairoa (0.1%) was the only district in the Hawke’s Bay region that showed a small amount of positive home value growth, with Central Hawke’s Bay District (-1.2%) also posting a small average loss this quarter.

QV Hawke’s Bay manager Damian Hall commented: “Activity continues to be sporadic but quiet for the most part. Many buyers and sellers appear to be waiting to see who wins the general election next month. That could possibly change things up a little in the housing market – although the curve will likely remain flat for some time to come if high interest rates continue.”

9.5%.

“Affordability is still a significant concern as the majority of borrowers are yet to feel the full weight of higher interest rates,” said local QV registered valuer Olivia Betts.

“Demand for residential

of the city are now looking mildly financially unappealing to subdivide, due to the fixed cost.”

Wellington Wellington’s rolling three-monthly rate of home

Nelson

Palmerston North The average rate of home value decline has remained relatively consistent in Palmerston North.

The city’s average home value has reduced by 0.3% to $622,546 this quarter, compared to a 0.4% average quarterly decline in last month’s QV House Price Index. The average annual rate of decline has also dropped from 10.8% to

reduced by 0.6% to $827,196 this quarter, which is an improvement on the 1.7% average decline previously recorded for the June quarter.

Local QV senior consultant Blake Ngarimu commented: “Home values across the Wellington region have experienced another month of minimal value movement, with Hutt City and Upper Hutt experiencing small reductions, and Kapiti, Porirua, and Wellington City recording small gains.”

“The most competitive end of the market is the entry level, where some properties have been receiving multiple offers from firsthome buyers. Though the Official Cash Rate has not changed, banks have further increased interest rates and potential buyers report being tested on upwards of a 9% interest rate.”

With the election just over a month away, Mr Ngarimu said National’s recent announcement to restore interest deductibility may entice investors back into the market. “Coupled with the increased migration of 86,000 people, it is also likely that we will see pressure on rents,” he added.

property remains relatively subdued. However we have seen a greater level of buyer interest over the last two months. The number of sale transactions is still low. Infill sections have had the hardest hit as prices continue to fall. Many areas

value reduction has eased for the fifth straight month – with the region even posting a small 0.4% average home value increase in the month of August.

The latest QV House Price Index shows the region’s average home value has

Home values continue to reduce at a consistent pace in Nelson.

The city’s average home value decreased by 2.4% to $765,061 this quarter, which is the same average rate of decline as in the last QV House Price Index.

QV Nelson/Marlborough manager Craig Russell said it was still a “low sales volume environment” – though listing numbers were expected to increase in spring, as they typically do every year. propertyandbuild.com 13

ELECTION 2023 “There is still an oversupply of modern typical homes in the Richmond location, which have been sitting on the market for an extended period. A number of properties are also affected by conditional contracts, and in particular chain sale situations whereby the sale of a vendor’s property is contingent on the sale of the purchaser’s property.”

“The market is still heavily influenced by changes in the Official Cash Rate. Recent media articles suggest that interest rates will stay higher for longer, which is expected to impact the market going forward,” Mr Russell added.

our previous index.

Local QV registered valuer Olivia Brownie commented: “While the cycle appears to

– but there are signs that confidence in the market is growing.

Home values decreased

Queenstown

West Coast Residential property values have increased by an average of 2.6% this quarter on the West Coast.

On a more localised level, home values continue to fluctuate month to month as a result of heightened volatility in the market. They are down on average this quarter in Buller (-4.2%) but up on average in Grey District (7.5%) and Westland (2.7%).

The average home value in the region is 6.6% higher than the same time last year – a stark contrast to an 8.2% average annual decline nationally.

Canterbury Home values in Christchurch have experienced a modest increase once more.

For the second straight QV House Price Index, the Garden City has experienced a small increase in its rolling three-monthly rate of home value growth – up 0.1% to $727,982. But it’s a smaller average increase than the 0.8% reported in 14 propertyandbuild.com

designed three townhouse development of between two and three bedrooms, two bathrooms, and single internal garage, sold out off the plans within four days of being released to the market.

“Existing builds continue to remain unattractive to investors with no interest deductibility applicable combined with higher interest rates.”

be turning, we expect to see some months positive and some negative throughout the remainder of 2023.

Economic pressures are still having a firm impact on the Canterbury property market, but the downturn does appear to be over now, with a subdued market expected over the coming months.”

Meanwhile, home values have reduced by 0.2% across the wider Canterbury region in the August quarter, just down on the 0.1% increase reported in the July index.

“Canterbury’s residential market has entered spring with some momentum. With an increase in sales over the past month, we have seen a minimal quarterly decline in home value that is more or less the same as the previous quarter,” Miss Brownie added.

Dunedin Home values continue to ebb away in Dunedin at a relatively consistent pace

in Ōtepoti by an average of 1.7% in the July quarter, compared to a 1.5% quarterly decline reported in the previous QV House Price Index. The city’s average home value is now $607,354, which is 6.7% less than the same time last year.

Local QV registered valuer Rebecca Johnston said greater buyer confidence was slowly returning to the market due to expected interest rate peaks and a growing expectation that the current downturn was nearing its bottom.

“Though lenders continue to make small increases to their 3-5 year rates, it appears we have seen the majority of significant interest rate hikes. Predications are for an easing of the Official Cash Rate and correspondingly interest rates sometime in 2024,” she said.

“New-build property developers say investors are beginning to come back into the market. For example, a smaller architecturally

Highly volatile residential property values continue to zig and zag in Queenstown.

The average home value has increased by 0.8% this quarter to $1,732,135 – an improvement on the 1.3% quarterly decline reported in last month’s QV House Price Index.

That figure is now 2.4% higher than the same time last year, compared to a 8.2% average annual home value loss nationally.

Invercargill Home values are building again in Invercargill.

The city’s rolling three-monthly rate of home value growth is positive for the third month in a row, increasing from 0.2% in June and 0.8% in July to reach 1.5% in August 2023. The average home value locally is now $461,145, which is 2.7% lower than the same time last year.

Local registered valuer Andrew Ronald commented: “While there’s still healthy demand from first-home buyers, there’s still only a limited number of investors active in the market currently, which is due to interest rate rises and changes to tax deductibility rules.”

ELECTION 2023

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Rental stock reaching crisis levels Six months ago an average of five prospective tenants were viewing each rental property, but today that number is 50, Impression Real Estate reports.

Chief Executive Rishabh Kapoor explores what is driving the rental shortage

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chronic shortage of residential rental stock caused by increased migration and recent weather events is reaching a crisis point.

Impression Real Estate figures show the number of prospective tenants viewing each rental property has increased 900% – from an average of five per property to over 50 in just six months. Data also shows prices have increased by around 5% over the same period.

The shortage is putting additional pressure on Auckland’s inner-city property market and desperate tenants are offering up to $50 per week more than the listed price. Some have even offered bribes to property managers to secure a rental ahead of others.

The high demand for CBD apartments comes from those who have lost their homes as a result of storms earlier in the year, along with recent migrants.

The rapid growth in these two market segments has significantly increased the number of people who are new to renting and unfamiliar with current industry regulations.

More needs to be done to better inform and educate landlords and, these new tenants who are often unaware of their legal rights and responsibilities under the Residential Tenancies Act.

Latest research from the Ministry of Justice shows there are an average of over 2,100 applications to

her expertise in the form of a virtual avatar with our clients.

The new AI chatbot will

the Tenancy Tribunal each month and they are up 43% on the same period last year.

In a first for the local industry, the real estate firm has artificial technology (AI) designed to help tenants find new properties and educate them, and landlords, on their rights.

The technology which uses a chatbot as an interface for tenants and landlords, is currently being trained to answer a wide range of questions and is available at any time of the day – especially valuable to new migrants who may be searching for information while still living in a different time zone.

The bot has been named Marcia after one of Impression Real Estate’s team members. For the past 15 years, Marcia has answered numerous inquiries and we wanted to be able to share

be able to answer common queries such as how to receive a bond refund, where they can find a copy of their lease agreement, or how to locate a plumber for a water pressure issue.

As well as providing practical solutions and driving greater efficiency, over time, it will learn to assist with the legal fundamentals of the tenancy and help tenants and landlords to adhere to their legal obligations in a very transparent way.

While technology is part of the solution for these new tenancies, Impression Real Estate urgently needs another 120+ homes or apartments, to meet market demand.

What we have noticed is that after the recent weather events our clients have decided they no longer want to reside in properties that have large sections

or are adjacent to hillsides and could be vulnerable to slips or flooding, so they are moving into the CBD – which is putting even more pressure on an already tight apartment rental market.

We are also seeing others downsize from larger family homes because they can’t afford to pay the mortgage with current interest rates and are selling up and wanting a rental property to live in.

In addition to this new domestic pressure we have migrants coming in who are also wanting to live in the central city.

There is significant scope to introduce other new technology to support the tenancy process including virtual viewings of properties, however, this is not well supported by current Government policy.

We know there is demand from tenants, particularly those moving here from overseas to be able to conduct a remote viewing of a new property, however, current regulations would need to be updated to accommodate this.

This would mean a prospective tenant could view a property from offshore and be able to lease the dwelling before they arrived. There would be a grace period included in case anything needed to be addressed when they inspected it in person. propertyandbuild.com 15

ELECTION 2023

Development activity falling as headwinds intensify Following an extended period of elevated development activity across New Zealand, Colliers expects new building construction to fall to its lowest levels since the Global Financial Crisis within the next 12 months

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confluence of mounting challenges has resulted in a marked slowdown in development activity over recent months.

A combination of factors such as higher interest rates, a more stringent lending environment, elevated build costs and a cooling economic backdrop, have increased the difficulty of achieving development feasibility.

However, the lack of building now will likely lead to availability constraints when conditions improve, 16 propertyandbuild.com

repeating challenges of the past.

Constraints force developers to take a cautious approach The deceleration in activity can be attributed to a range of factors. The most prominent is the amplified cost of financing and reduced access to funding. Interest rates have surged at an unprecedented pace as the Reserve Bank seeks to curb inflation. Consequently, financiers have adopted a more cautious lending

stance, making it harder for developers to secure funds for their projects.

Another pivotal factor contributing to the slowdown is the substantial escalation of construction costs. Escalating material expenses, disruptions in supply chains, and a shortage of skilled labor have all driven up construction expenditures. The challenge of achieving project viability is compounded by the cooling economic climate, which renders an increasing number of businesses sensitive to rising rental

costs. This situation frequently compels developers to re-evaluate the feasibility of their projects, potentially resulting in delays or cancellations.

Data suggests activity could slow further Building consent data clearly illustrates a significant loss of momentum within the residential apartment and industrial sectors.

Measured over a sixmonth rolling period, consent issuance for apartment

ELECTION 2023 developments in New Zealand reached a cyclical peak in January 2023, with the approval of 2,793 apartments – the highest figure since May 2005.

Subsequently, consents have fallen sharply and by June this year were down by nearly 50%.

The cyclical peak for industrial sector consent issuance was reached in the six months ending March 2022, when the total floor area consented reached its highest level this century.

However, recent months have seen a substantial decline in new consents, with the June figure dropping by 37% from the peak.

While office and retail consents tend to be more volatile due to the significant impact of a few large projects which have longer development timeframes and lag in dataflows, other indicators unmistakably demonstrate the deceleration in development activity.

Recent data from Statistics New Zealand reveal a decline in ready mix concrete production, underscoring the sluggishness in the construction sector. In the year ending June 2023, production dropped by 4.2% compared to the record high of the preceding 12 months.

Quarterly figures depict an accelerating decline, with June 2023 production down by 10.9% year-on-year.

Anticipating future imbalances While the current slowdown poses challenges, a more profound shift might await New Zealand’s real estate landscape in the future. The slowdown in development, if sustained, could lead to a supply-demand imbalance, particularly within subsectors in which occupier demand

remains evident.

These supply-demand imbalances are likely to emerge first within the residential and industrial sectors followed by the prime end of the office mar-

cost-effective building technologies, including modular construction, holds substantial potential for increasing project feasibilities.

Demand for industrial

ket. This will clearly provide opportunities for experienced and well-financed developers.

premises has remained strong, particularly from an expanding logistics sector.

Despite this and regardless of rapidly rising rents, developers are encountering mounting challenges in rendering projects financially viable.

In addition to the general constraints discussed earlier, most established precincts are grappling with land shortages, resulting in significant value increases in recent years. Consequently, maximizing the utilization of land parcels has become increasingly crucial to make new projects feasible. This is being achieved by increasing cubic capacity rather than merely expanding floor areas. The rise in stud heights accompanies the adoption of automated loading and collection technologies, making taller racking systems feasible.

Feasibility for large-scale office projects remains a challenge given the economic backdrop and evolving work practices.

However, the demand for high-quality, environmentally sustainable premises in prime locations endures.

This demand continues

Emerging shortages to underpin development A sharp rebound in migration is bolstering demand for housing just as development slows, mirroring the situation which arose post the GFC which triggered a surge in property prices and rents, exacerbating affordability issues. Avoiding a repeat of this scenario will require collaboration between policymakers, developers, and investors.

Mitigating bureaucratic constraints and minimizing the financial burdens on developers would clearly be of benefit.

This could involve a comprehensive assessment of development levies, potentially considering temporary or permanent adjustments.

Stimulating investment in the Build-to-Rent sector by removing obstacles to overseas investment could significantly accelerate expansion within the sector.

Furthermore, embracing an escalated adoption of

to underpin development intentions, albeit with investors and developers adopting a longer-term outlook. This is exemplified by a recent joint venture partnership formed to invest in the regeneration of Auckland CBD’s Te Tōangaroa precinct. The collaboration includes Precinct Properties, PAG, and Ngāti Whātua Ōrākei.

The joint venture will focus on repositioning assets and enhancing the Te Tōangaroa precinct. The land will remain under the ownership of Ngāti Whātua Ōrākei, while the investment partnership will hold a 123-year prepaid ground lease. This pre-payment mitigates uncertainties surrounding future ground rent increases, a concern that has impeded investment in premises located on leasehold land in other areas.

Momentum will return to New Zealand’s development cycle While the prevailing slowdown has some way to run yet, a return to an increased level of development will clearly occur in the future.

The convergence of factors that precipitated the current deceleration – from elevated costs and cautious financing to economic cooling – has led to a period of adjustment. However, history demonstrates that development cycles are intrinsic to the industry.

The combination of enduring demand, an easing of current constraints, and the increased adoption of innovative technology will lay the foundations for the cycle to shift once again, leading to a renewed upswing in development activity.

propertyandbuild.com 17

ELECTION 2023

Would a land value tax incentivise housing growth A 0.75% tax on urban residential land as proposed by the Opportunities Party (TOP) to help fund income tax relief could come with the added benefit of helping solve New Zealand’s housing shortage

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he value of land is collectively and publicly created, Strong Towns’ Rick Rybeck writes.

But private landowners can appropriate this publicly-created value regardless of whether or not they put it to productive use. In other words, they don’t have to contribute to the good party going on around them.

“Speculation inflates land prices near existing infrastructure, thereby pushing development to cheaper (but more remote and less productive) sites.

This destroys farmland, and it requires the wasteful duplication of expensive infrastructure, increasing tax burdens,” Rybeck writes.

Land speculation is often referred to as “real estate investment”, he says. But “investment” is the creation of something new that enhances future production. Buying and selling land creates nothing; it’s what you do on the land that creates value. Land speculation in itself is just gambling. It is betting that the work of the community will enhance land values, without contributing to that 18 propertyandbuild.com

enhancement.

Rybeck says a land value tax (LVT) would return the value of land to the communities that created it, recycling that value to fund public needs like infrastructure creation, operation and maintenance. The benefits are several: • LVT makes land speculation less profitable and reduces the incentive for fringe suburban development.

• Shifting the property tax off of building values and onto land values can make both buildings and land less expensive, thereby making housing more affordable while fostering business growth and employment.

• Communities that have implemented this reform have outperformed comparable communities using the traditional property tax.

Rybeck does point out that most things that we’re familiar with are produced – if we tax them, production

falls and prices rise. Therefore, many assume that if we tax land, its price will rise.

“But land taxes don’t reduce the amount of land.

Taxing land values reduces the benefits of land ownership. This reduces land prices,” he writes.

LVT enjoys broad support among economists. Yet few places are implementing it, which raises the question: Why hasn’t land value taxation been implemented more widely?

World Economic Forum Senior Writer Victoria Masterton reports of one example in the United States in Harrisburg, Pennsylvania, which started using land taxes in its system in 1975.

Land was initially taxed at double the rate of buildings.

Now land is taxed at six times the rate of buildings.

“This is believed to be behind improvements that have revitalized the city,” Masterton writes.

“The number of empty buildings has fallen, investment and jobs have grown and Harrisburg has benefitted from greater tax revenues.”

Masterton explains that with property taxes (or council rates), owners who improve their properties can be taxed more, which disincentivises investment.

With land taxes, property improvements aren’t taxed.

Owners are encouraged to make improvements, to increase returns from their land.

“This means the owner of a vacant plot of land would pay the same amount of taxes as a neighbouring owner with a block of apartments on their land.

“Land value tax incentivises landowners with empty or run-down buildings to get them back into use.

They won’t be taxed on these improvements. And the money they might make through rents will help cover their land tax bill,” Masterton writes.

“As a result, communities might see the supply of housing in their area increase. Neighbourhoods which previously had lots of empty properties could be revitalised.”

TOP expects an annual 0.75% LVT in New Zealand to generate $7 billion a year, which it would use to fund $5.8 billion of income tax cuts and a Teal Card scheme to support young New Zealanders who are worse off than the previous generation.

The party says its income tax relief would often outweigh costs potentially being passed on to renters and ultimately an increase in the stock of rentals as a result of the tax would drive down rent prices. Commercial, rural, conservation and Māori land would be excluded from the policy, and superannuants could opt to defer payment until there is a change in ownership of the property.

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ELECTION 2023

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

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What makes SLABX200 different?

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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.

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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. propertyandbuild.com 19

ELECTION 2023

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aleb Paterson of real estate agency Paterson Luxury, says news of the policy reached buyers in offshore markets almost immediately, triggering a surge in calls to his firm. He has since been fielding enquiries from high-net-worth buyers from around the globe.

“There has been pent-up demand from our international clients who have been unable to access New Zealand property for the past six years, and they are highly motivated to seize this potential opportunity.

“While many of us are struggling with the cost of living and current interest rates, for those without budget limitations, New Zealand is a very desirable place to live. Internationally we are perceived as a ‘safe haven’ following COVID-19 and as the Ukraine war continues to impact Europe,” he says.

Paterson says there is a significant difference in buyers looking for a $3m property compared to those at the $30m+ end of the market.

He says there is even potential to scale the level of taxation so that those at the upper end pay a greater percentage.

“While paying $4.5 tax on a $30m property may sound significant to most of us, the opportunity to purchase in New Zealand freely outweighs any tax the government would throw at them.

“If this policy is introduced, it will be a return to a time when we are dealing consistently with billionaires again. This segment will come in and buy what they need and what they want – with little concern for price if the property is right.

“The higher the price point of property the less the buyer is concerned with 20 propertyandbuild.com

Foreign buyer housing policy grabs attention of offshore billionaires Real estate agency Paterson Luxury is reporting a surge of enquiries from Europe, the US and Asia following the National Party’s announcement that it would allow overseas buyers to purchase properties upwards of $2 million and tax those transactions at 15% tax, and it is possible that taxation for this segment could be scaled so that these buyers pay 20% or even 25%.

Paterson believes an influx of these buyers will also help arrest the decline in

the construction sector.

“We know that with all of the new legislative changes and new building code coming out in September it is going to be even more costly for Kiwis to build.

However, the introduction

of foreign buyers could stimulate the construction as foreign buyers seek to build more luxury properties, or domestic buyers downsize and build something smaller of their own.

“Greater access for foreign

ELECTION 2023 buyers could also pave the way for international developers to come back into New Zealand, purchase larger land lots and create more housing stock for the general market,” he says.

He says if the policy were to be introduced before Christmas, they would expect a flood of activity in January.

Paterson says demand for property is already high in Auckland, Queenstown and Northland.

“There is huge interest from some of the billionaires we are dealing with for property in the Bay of Islands. They are looking for acres of land on the water so they can park their launch, but also have room to land their helicopter.

These buyers want to fly in with their friends easily and also need room to build additional amenities,” he says.

Paterson’s advice for local buyers and vendors now is relative to their personal circumstances.

“Buyer activity is really strong at the moment. I have $50m worth of listings coming on the market in the next six weeks and I have had a call from every single homeowner waiting to know if they should wait.

“For buyers, they should be trying to grab stock right now but from a vendor’s perspective, they might be better off waiting – depending on what their needs are and whether they plan to reinvest in the market once they sell.

“For those looking to move sideways, it is irrelevant.

But if you are looking to downsize, there could be significant potential upside to holding off.

“Regardless of this, this policy would bring a flood of money into New Zealand,” he says.

Agent lifts lid on luxury property industry The growing influence of offshore buyers in recent years is seeing our topend properties become more extravagant, says Caleb Paterson of Paterson Luxury, which specialises in multi-million dollar residential estate sales New Zealand’s most expensive residential homes are increasingly becoming more opulent as buyers install internationally inspired ‘showpiece’ features and technology, ranging from solid gold bath taps to state-of-the-art wardrobe security systems for million-dollar-plus designer handbag collections.

Buyers in this part of the market are well travelled and expect their property to be elevated beyond a tennis court, pool and view, which may have previously set a standard. These buyers have their own tastes and do not simply rely on the expertise of architects and interior designers, but rather take inspiration from a variety of sources from around the world.

They are global citizens and are often inspired by what they’ve seen overseas in luxury properties, lodges and hotels such as the Four Seasons, they will even add design elements from commercial buildings and want these incorporated into their homes.

Both internal and exterior concept features are added with the intention of elevating the property and enhancing the lives of its occupants. Often these are at a scale that most would be staggered to experience in a residential setting.

As an example, one of the largest outdoor pools I have seen covered approximately 250 sqm and came complete with a terraced waterfall and fountain, volleyball nets, waterslides and a function that produces a cooling mist at the touch of

the button.

Technology and home automation are key areas where high-net-worth individuals invest a considerable amount of money. This goes beyond the hidden TVs that many properties have these days. In one residence the kitchen was transformed into a high-end cocktail bar which emerged from the floor on demand.

It is also becoming common for homeowners to create lavish bathrooms.

One couple had installed his and her baths for the ultimate wind down experience, complete with champagne fridge and flat screen TV so they could relax in front of their favourite show.

I have also been through a home with solid gold taps worth hundreds of thousands of dollars fitted over a claw bath.

Another home had a full-length 25m commercial-grade pool with four lanes because the owner’s child was a competitive swimmer, it was set indoors alongside a sauna, plunge pool, and fully equipped gym.

It is these curated design elements which heighten the perceived value of these multi-million dollar properties to the most discerning segment of the market.

Potential buyers will approach Patterson Luxury to find homes fitting their personalised criteria.

I am currently looking for a property for a car enthusiast who wants a place where he can store his collection of 20 luxury vehicles in a purpose-built facility he will construct on site.

For this buyer, it is less about the quality of the home and more about having enough space to accommodate his interests.

The maintenance of these luxurious residences is often a full-time job with many property owners having additional quarters for live-in help who assist with; landscaping, building, property maintenance, cooking, cleaning and nannying services.

There are also separate kitchens so when entertaining staff can perform culinary duties without guests seeing them come and go.

One property owner was fastidious and liked to keep the grounds immaculate, they paid more than $5000 a month for this service. Others who want their lawns continuously groomed and maintained at a specific height are investing in robotic lawnmowers with GPS technology allowing them to navigate the section.

Outside technology and sports and leisure facilities, high-net-worth clients also invest heavily in the arts.

Sometimes the properties are even sold with valuable works and collections included in the list of chattels.

Despite perceptions, these homes are not always in the pristine condition that one would expert of a high-end property. Outside appearances can also be deceiving. Often the homes may have little street appeal but when you walk inside the interior you will see a number of grandiose items that take you by surprise. propertyandbuild.com 21

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t’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.

22 propertyandbuild.com

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.

National’s new housing strategy ‘a mixed bag’

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 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-

ELECTION 2023 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

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lanning 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 conver24 propertyandbuild.com

New Zealand cities losing their leaves As we densify our cities to accommodate 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 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.

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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

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he 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.

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-

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.

“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. propertyandbuild.com 25

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lobal 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

26 propertyandbuild.com

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Amenity is key 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. 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

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.

propertyandbuild.com 27

ELECTION 2023 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 28 propertyandbuild.com

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

ELECTION 2023 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. propertyandbuild.com 29

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Safer, faster, multipurpose telehandlers

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The introduction of game changing 360-degree rotating telehandlers looks set to disrupt the infrastructure, civil and construction industries

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he days of needing on site a mobile crane, a boom lift or other types of elevated work platforms, a forklift and an excavator are numbered - one machine can do it all.

Rotating telehandlers may look a lot like their conventional cousins, but they are very different.

Their arrival on New Zealand work sites has completely changed the way project management is planned and the way on30 propertyandbuild.com

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-

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

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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.

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n 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 safety of the operator and people nearby is paramount 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.

propertyandbuild.com 31

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How will new energy standards affect Australia’s building sector?

With changes in Australia’s National Construction Code (NCC), the building sector there needs to adapt, Environment.co’s Jane Marsh says

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n addition to a few other adjustments, the most considerable difference comes with the Nationwide House Energy Rating Scheme (NatHERS).

Since 2010, houses built in Australia have had to confer a minimum six energy rating. However, with this new legislation, this is no longer the case — the standard has changed from a six to seven. Here is 32 propertyandbuild.com

what the recent seven-star rating changes and the impact it could have on the Australian building sector.

What Is Changing With the New Energy Efficiency Standards?

NatHERS is an energy efficiency scale for houses built in Australia and goes up to a ten — which means the home requires

no artificial temperature control. In other words, the higher the rating, the less energy it would use. This energy-efficiency scale considers a few factors, such as the home’s location, insulation, materials, design aspects, climate and layout.

Current residential buildings in Australia account for 24% of overall electricity usage and 10% of total greenhouse

gas emissions. With the implementation of this higher rating system, a decrease of 24% is projected for Australia’s home energy. In addition to cutting energy costs, these standards will decrease overall emissions and improve the protection homes offer against weather effects.

In other words, this bump up in rating will make

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homes more comfortable to live in, better protect them from weather conditions and make them more affordable. Another change with the improved rating is a new Whole of Home energy budget.

The Whole of Home score determines how a house stacks up to the NCC annual energy budget. The score considers the energy efficiency of appliances and on-site energy generation or storage. In other words, solar energy can offset the power devices — such as heating, cooling, hot water and lighting systems — use.

could rise, the difference should be insignificant.

They also state many homes in Australia are already being built with a seven-star rating. This shows it is possible to build a house with cost-effective measures that comply with the rating while following smart design principles.

produce less emissions makes the new seven-star rating a welcome necessity.

There are also rebate programs available for consumers — such as the Solar Homes Program — to help lower the initial price of solar energy.

For the building sector to reach the new rating,

How Will These New Energy Standards Impact The Building Sector?

The new energy rating has already been made accessible, allowing the building sector to accommodate the new standard. According to the Victoria State Government, the cost of building a home should not increase much if construction workers follow smart design principles early in the building process. While the price

Experts project this switch in ratings will cut energy bills for new homes by $576 a year.

A seven-star rating will make homes more energy efficient, meaning cooling and heating a building will cost significantly less. This decrease in energy costs while enabling homes to

emphasis on the design principles and the home’s orientation is necessary.

For example, houses should face a way that takes full advantage of the sun.

Utilizing practices like these allows for more heat in the winter months.

Experts should explore other opportunities to make

the home cooler in the summer, such as windows stopping heat from entering the house. A stronger focus must also be on improving the overall insulation of the building, such as the ceiling, under the floor and walls.

Energy-Efficient Homes Are Helping Save the Planet For many, this improved rating comes as a welcome addition. This new rating system ensures homes are built with energy-efficient practices in mind while reducing carbon emissions.

This will help Australia’s construction sector create houses that aim to reach net zero emissions.

The changes improve the comfort new homes provide, reduce the cost of electricity bills and are steps in the right direction in the ongoing battle against climate change.

While it might take some time for the necessary adjustment to occur, the benefits of this new and improved rating system are well worth the effort. propertyandbuild.com 33

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A collaborative way forward for infrastructure & construction Waihanga Ara Rau, the Workforce Development Council for Construction and Infrastructure, has published its Statement of Strategic Direction (SSD) outlining what it intends to achieve for the sector over the next five years

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he Waihanga Ara Rau SSD outlines a focused and collaborative approach to shaping the future of Aotearoa, by strengthening the construction and infrastructure industry workforce.

The publication was developed with the help of people in the sector.

34 propertyandbuild.com

This included industry employers and associations, educational institutions, iwi, hapū, and Māori organisations. It highlights the Waihanga Ara Rau commitment to honouring te Tiriti o Waitangi and sets strategic goals to foster trust, inclusion, and success in the industry.

The mahi outlined in this

publication builds on what Waihanga Ara Rau has already achieved, which includes: • Completing a Workforce Development Strategy with the Electricity Supply Industry.

This identified several Strategic

•

Goals and action recommendations about attracting new people to the workforce and the importance of clear career planning for the current workforce.

Completing Waters Services projects.

These show that 6,000-9,000 extra

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•

•

•

•

people are needed in this industry over the next 30 years.

Publishing its first Workforce Development Plan.

This plan is the starting point for the development of approx. 11 Strategic Sector Workforce Development Plans across the Construction and Infrastructure sectors.

It looks at past workforce trends, captures a snapshot of the current workforce and paints a picture of the future. As a living document, it will be updated as we develop Workforce Development Plans for Strategic Industry Groups and ultimately individual industry workforce development plans.

Creating the online Workforce Information Platform (WIP.org.nz) WIP displays national and regional gaps and surpluses within the construction and infrastructure labour market determined by the dollar value of planned and active projects in the pipeline. It shows the occupations and numbers of people we need to put that work in place.

Launching tradecareers.co online toolkit.

This toolkit helps employers hire and retain women and demystifies the construction and infrastructure sector for women.

Launching fifteen regional reports as part of the

Regional Construction Workforce Planning and Development Project.

• Reviewed and developed nearly 1,400 standards and over 50 qualifications. This has maintained the currency of industry qualifications and begun the focus on creating a skilled workforce for the future.

The SSD informs how Waihanga Ara Rau will make a difference for industry in the next five years including its short, medium and long-term focus areas.

Key highlights include: •

Achieving success for Māori: Demonstrating a commitment to iwi, hapū, and Māori organisations, ensuring their voices and aspirations guide the sector’s future.

• Industry trust and confidence: Building strong relationships, partnerships, and positively influencing the sector.

• Transforming the workforce: A commitment to evidence-informed advice, high-quality training, innovative education products, and fostering inclusive future-focused pathways for all industry members.

Philip Aldridge, Chief Executive of Waihanga Ara Rau, said, “Our Statement of Strategic Direction not only lays out our vision for the coming years but stands as a testament to the collective voice and aspirations of

those we consulted. It’s not just our roadmap, but a commitment to the industry, Māori, and the wider community.”

This strategic document will guide what Waihanga Ara Rau does in the coming years and will be reviewed to ensure it remains current and effective. It will directly inform the annual Operational Plan, detailing deliverables, work plans, outcomes, and success measurements.

Waihanga Ara Rau invites everyone interested in the future of Aotearoa, New Zealand’s construction and infrastructure sectors to explore the Statement of Strategic Direction and engage in the discussion.

that enables everyone to reach their potential.

• •

•

•

About Waihanga Ara Rau Waihanga Ara Rau is the Workforce Development Council (WDC) representing and supporting the construction and infrastructure sector in vocational education and training.

It is committed to providing a strong voice for the industry while ensuring a future-fit workforce and honouring Te Tiriti o Waitangi and Māori-Crown relations.

Its vision is a construction and infrastructure sector

•

•

Its core functions are to: Provide skills leadership by ensuring our essential building, construction and infrastructure sectors are training new and existing workers to the highest and most consistent standards.

Lead the development of industry qualifications, set industry standards and assess training provision against these industry standards.

Bring consistency to industry standards and learning outcomes – making sure they are applied across the motu, and all learning modes.

Be the voice of industry to represent industry interests as well as being a system leader providing input on policies that matter most to industry.

Provide advice to the Tertiary Education Commission (TEC) on investment in vocational education and determine the appropriate mix of skills and training for the industries they cover. propertyandbuild.com 35

ELECTION 2023

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he partnership seeks to accelerate growth and innovation across construction businesse-s of every size and stage.

As part of the agreement Callaghan Innovation will deliver several Accord initiatives through a new programme: Construction Activator.

The Construction Activator will bring together and build on existing business services supported by MBIE and Callaghan Innovation, such as the Regional Business Partner Network, Digital Boost and Business Mentors NZ, and offer an expanded, end-to-end business capability development programme that is targeted at construction businesses.

The Construction Activator will help to build collaborative construction business communities that drive connections, innovation, and business growth, as well as equipping business leaders with the skills and tools they need to improve business performance. The programme will be relevant for businesses at all stages, whether they are looking to accelerate their growth today, or make incremental improvements over time.

Making up seven per cent of our national GDP and employing 10 per cent of the national workforce, the construction sector is a significant contributor to the New Zealand economy. The sector has been identified by the Government as one of eight industries with the potential to contribute to a future, high-productivity, high-wage, low-emissions economy.

“We won’t see the real transformational shifts that the Construction Sector Accord is trying to achieve unless construction busi36 propertyandbuild.com

Construction partnership aims to accelerate growth sectorwide The Construction Sector Accord and Callaghan Innovation have agreed to partner to address systemic challenges and build resilience across the construction sector nesses are able to scale up,” says Accord Steering Group Co-Chair, Andrew Crisp.

“Through this partnership with Callaghan Innovation, we will create a central hub where businesses can

“It’s hard for business leaders to think about longterm growth when forces beyond their control mean they need to focus solely on the day-to-day, and even business survival.

access tools and resources, learn from each other, and get support to innovate and grow. The opportunity to unlock the productivity challenges facing the sector is massive.”

Callaghan Innovation Chief Executive Stefan Korn says he is delighted to support the construction industry to overcome these challenges and position itself for future success.

“We’re looking forward to collaborating with business leaders, researchers and industry organisations to help construction businesses overcome these big challenges, while also taking advantage of the opportunities innovation offers to support industry transformation.”

Stefan Korn says the soon to be developed Construction Activator programme

will be central to Callaghan Innovation’s approach to driving transformation across the construction sector.

“We want to make the biggest impact we can and make it easy for industry to work with us, and our partners, who are so vital to achieving our shared goals for the construction sector.

“The Construction Activator programme will be a one-stop-shop for construction businesses looking to grow faster so they can reach their full potential. Over time the programme will also be pivotal to enabling an enduring, system-wide construction sector transformation.

“The challenges are significant but so are the opportunities. We look forward to the journey, together,” says Stefan Korn.

The partnership will get into action soon with live, in-person Connect Events in Auckland, Wellington and Christchurch from mid September. More details will be announced soon.

Sponsored Article

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propertyandbuild.com 37

ELECTION 2023

Sponsored Article

How BIM Will Impact Your Future Infrastructure Projects

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or 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 38 propertyandbuild.com

— 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

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

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 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.

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The Evolution of

BEING 100% CERTAIN TRANSFORMING THE WAY THE WORLD BUILDS Software for Capital Projects Learn more at InEight.com/Being-Certain propertyandbuild.com 39

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Are you maximising the benefits of your AEP? The Accredited Employer Programme (AEP) can be appealing and costeffective for large employers seeking to lower costs and self-manage injury claims within their workforce, Gallagher Bassett Chief Client Officer Steven Walsh says

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acilitated by the Accident Compensation Corporate (ACC), this scheme allows large organisations to take control of their ACC levies, actively manage their Health and Safety environment and the total cost of when employees injure themselves at work, often resulting in better outcomes for their injured employees. The AEP enables the organisation to ‘step’ into the shoes of the ACC, but it does come complete with the obligations that ACC has to injured workers. These responsibilities when managing workplace injury management claims require considerable skill, time, knowledge and 40 propertyandbuild.com

resourcing – a limitation for many organisations wishing to leverage the many benefits of participating in the AEP. These limitations can play out in many forms, including; not having a claims team with adequate knowledge of the correct adjudication and legislation to apply which can result in additional claims costs, lack of independence when handling colleagues claims, availability of advanced claims management platforms and best practice, lack of data and analytics when coupled with manual and antiquated processes resulting in excessive administrative costs, not to

mention the advances and best practice in the rehabilitation. These risks are only compounded when staff retention is challenged. To counteract these challenges, part of the ACC’s AEP program allows companies to manage their claims through a third-party claims administrator (TPA).

TPA’s support a variety of government departments and agencies, well-known large New Zealand businesses and self-insured companies with their workplace injury claims, applying their highly skilled people to problem solve those existing AEP challenges and deliver superior claims management and

resolution. We spoke to Steven Walsh, Chief Client Officer, Gallagher Bassett, New Zealand on how the AEP program can be maximised through partnering with a TPA.

First, what are the constraints of using the AEP program?

The AEP program can be ideal for large employers that have the desire and capabilities to take control of their workplace health and safety practices and have a ‘hands on’ involvement to ensure that injured employees are provided with the best possible outcome when injured perform-

ELECTION 2023 ing their duties at work, which, with the impact of COVID-19, now includes those injured when working from home.

Meeting the criteria set by ACC To be eligible to join the ACC’s AEP program, employers must meet various requirements including being able to: • Demonstrate their experience and commitment to effective workplace health and safety • Show their commitment to preventing injuries and providing the support and time for rehabilitation should it be needed • The policies, procedures, and resources for injury prevention, claims management and rehabilitation provide audited financial records that show the business’ financial strength and stability to meet the costs of their employees’ cover and rehabilitation • Pass an on-site audit conducted by an ACC approved auditor Even after your business has been accepted into the program, there are still limitations and obligations to the program that need to be understood before deciding if the AEP program is best suited for you. These include, but aren’t limited to: • Ensuring that you have the right cover plan option for your business. Options include whether the business will assume responsibility for claim management only until the end of the nominated claim management period and the financial liability

•

•

ceases at the end of the claim management period, or will the business assume responsibility for claim management to the end of your claim management period but financial liability remains for the lives of the claims.

Responsibility to the employee is not always capped (but it can be) – if an employee is injured or harmed in a fatal or serious workplace injury, you, as their employer, could be liable for supporting their financial needs for the entirety of the claim. The claim does not expire if your business leaves the AEP program.

Managing your participation in the AEP requires time and dedicated resources. If you do not follow the program, or manage your employees claims accordingly, the cost and time requirements of being part of the AEP program could be greater than your previous levy.

How can a business overcome these challenges?

Navigating the AEP requirements when managing claims can be daunting – which is where TPAs, like Gallagher Bassett, come in to offer support and guidance to your business.

It might seem counter-intuitive to partner with a claims administrator to manage your own people’s claims, but it’s often far more effective (in both costs and time) than managing your AEP internally or simply reverting

to the status quo of having ACC manage your injured employees. When you work with our team, you get access to a group of industry experts who are committed to a career in claims. We can provide claims professionals that are knowledgeable and experts in their field, that are continually instigating best practice in injury management, in an environment where they have development and growth opportunities to build a career at a company where claims are the core of what we do.

This means your employees receive tried and tested end-to-end support. From supporting businesses with their injury prevention strategies, to having dedicated claims managers who know your company’s people, processes and policies like their own, our team partners with yours at every step.

Companies who engage a TPA to overcome these challenges often see better rehabilitation outcomes and reduced return to work timeframes, meaning healthier employees and a healthier bottom line.

Latest changes In July, the Minister for ACC, Peeni Henare announced the Accredited Employer Programme (AEP) consultation outcomes.

The incoming changes are based on the feedback we received from workers, employers, health and safety experts and other interested parties during several rounds of co-design and the public consultation.

These changes are aimed at improving AEP so that it: • puts worker wellbeing at the centre of AEP • achieves better out-

comes by improving the oversight and guidance ACC provides to AEs • incentivises AEs to continually improve their performance.

Through the consultation, the Minister received detailed and considered feedback which helped to shape the final decisions.

A summary of the submissions can be found on the MBIE website.

Summary of consultation submissions Most of the publicly consulted proposed changes will go ahead, with amendments to the proposed health and safety assessment requirements and the full and final settlement for Accredited Employers on the Full Self Cover Plan.

To help us strengthen the programme, we will be refining AEP and providing further opportunities for Accredited Employers and other stakeholders to provide feedback over the coming months.

The new AEP framework will be effective from 1 April 2024. However, during the Levy Year 2024- 2025 Accredited Employers will have time to prepare and make any changes needed to start meeting the new requirements the following year. From 1 April 2025, all new requirements including performance monitoring come into effect.

The public consultation was undertaken by MBIE on behalf of the Minister for ACC and closed on 6 November. Further information on the consultation is available on the MBIE website.

Consultation on proposed changes to ACC’s Accredited Employers Programme

propertyandbuild.com 41

ELECTION 2023

Was the Covid-19 wage subsidy successful?

Two reports have been released detailing to what extent New Zealand’s Covid-19 Wage Subsidy Scheme preserved employment and supported businesses during the pandemic

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unded by the Ministry of Social Development, Motu Economic and Public Policy Research Trust found that the program was good value for money, helping workers and small business owners more than if there had been no support at all.

Their second report also highlights that the subsidy prevented mass layoffs and found no solid evidence that firms did not pass on the subsidy money to their employees.

The Covid-19 pandemic has caused substantial disruption in social and economic activity since 42 propertyandbuild.com

March 2020. The New Zealand Government reacted early, introducing stringent lockdowns to restrict the spread of the virus. At the same time, it introduced a series of economic policies designed to support the health response. The largest was the Covid-19 Wage Subsidy Scheme (WSS).

The WSS was a hightrust policy, giving subsidy payments to firms that expected to have a substantial drop in revenues because of the pandemic. The objectives of the WSS were to: avoid widespread layoffs

help firms maintain employment relationships with their workers maintain workers’ incomes to help meet their essential needs during lockdown periods.

The reports analyse the impacts of the WSS on both firm and worker level economic outcomes, adopting a ‘doubly-robust’ estimation approach that uses propensity score methods both to match subsidy receiving firms to similar non-subsidised firms, and to weight the outcomes analysis. The analysis focuses on the first four WSS-waves: the March

2020 (Original), Extension, Resurgence and March 2021 waves.

First, the reports analyses if the WSS reached the intended people and businesses. For the March 2020 wave, subsidised firms experienced substantially greater revenue declines than unsubsidised firms: the modal reduction in revenue for subsidised firms was about 50%. It also observes larger revenue losses relative to a year earlier for subsidised firms in the Extension and Resurgence waves, but revenue changes for the March 2021 wave are confounded by

ELECTION 2023 the March 2020 effects.

The subsidy payments were tied to firms, so it was less effective in supporting more precarious jobs and workers.

Second, are the effects of the WSS on firm survival and resilience over the short (6 months) and medium (12 months) term.

The reports estimate receiving WSS payments positively affected firm survival rates over the following 12 months for three of the four WSS waves. However, subsidised firms experienced slower subsequent employment growth than non-subsidised firms.

Third, the reports analyse the effects of the wage subsidy scheme on worker level outcomes. It estimates positive effects of WSS receipt on job-retention over both the short term (6-months) and medium term (12-months) for the March 2020, Extension and March 2021 waves; and roughly zero effects for the Resurgence wave. It also finds positive employment effects for workers over the short term for the March 2020, Extension and March 2021 waves, and over the medium term for the March 2020 and Extension waves; and slightly negative effects for the Resurgence wave. However, conditional on being employed, the reports estimate workers who received March 2020 wage subsidy payments experienced slower subsequent monthly earnings growth than comparable non-subsidised workers. The estimates for the later waves are more mixed.

There is no compelling evidence the WSS supported non-viable firms. However, the higher survival rate and lower

employment growth of subsidised firms suggests the WSS may have kept firms with poorer growth prospects in operation.

The reports also find no systematic evidence firms did not comply with

and to a lesser degree the Extension-wave.

The value for money of the WSS was calculated using cost-benefit analysis from a societal perspective, encompassing the New Zealand economy as a

their obligations to pass on subsidy payments to workers and endeavour to pay them at least 80% of their usual earnings.

However, some subsidy receiving firms paid workers at either the parttime or full-time subsidy rate, or at 80% of their prior earnings, during periods of subsidy receipt. This was relatively more likely to occur during the original (March 2020) subsidy wave,

whole. The subsidy was treated as a transfer (from the government into the wider NZ economy) and negative transfers (government money repaid or not spent, i.e.– subsidy repayments and unemployment support avoided) were subtracted from this. As analysis was done from a societal perspective, transfers were included as both a cost and a benefit, but with a

20% deadweight burden of raising tax revenue added to the cost side. The cost of administering the wage subsidy was also included.

The quantified benefits of the wage subsidy were increased output associated with people remaining in employment, and the value of the wellbeing they experienced from avoiding unemployment.

Outcomes were calculated by employment months gained over the short (6 month) and medium (12 month) term. The March 2020 wave had a favourable benefit-to-cost ratio of 1.20 after 6 months and 1.45 after 12 months. The 12-month ratio was 1.14 for the Extension wave, 0.83 for the Resurgence wave, and 1.63 for the March 2021 wave.

The first report concluded that, overall, the Covid-19 wage subsidy represented value for money. It allowed more workers to remain in employment and more sole traders to remain in business, than was predicted would occur without a wage subsidy.

To understand if the effectiveness of the wage subsidy as an intervention remained stable over time, it is recommended an evaluation is done on the August 2021 wage subsidy.

The value for money analysis could only identify direct benefits of the wage subsidy and so was limited to examining microeconomic outcomes.

It is recommended an investigation is done of fiscal interventions to mitigate the impact of the Covid-19 pandemic on the New Zealand economy, to determine their effectiveness at a macroeconomic level.

propertyandbuild.com 43

ELECTION 2023

Physical threats & abuse widespread in construction A study of psychosocial hazards in New Zealand construction businesses has revealed that workers are being abused and threatened, while health and safety leaders face huge challenges

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he study collected over 30,000 data points from construction businesses around the country and was led by Dr Steve Cantwell of safety software company SaferMe. The work was co-funded

by ACC via its Workplace Injury Prevention innovation programme, and supported

by CHASNZ (Construction Health & Safety NZ) and Civil Contractors NZ. Among the set of six key findings published: – Verbal abuse and physical threats are common – One in four workers avoid reporting injuries – Health & Safety leaders suffer low levels of support, more workplace bullying and poor role clarity SaferMe’s report follows on from the publication 44 propertyandbuild.com

of the Business Leaders’ Health and Safety Forum’s State of a Thriving Nation report, which showed New Zealand’s workplace death rate is double Australia’s, with deaths and injuries costing the country $4.4 billion per year.

“Psychosocial hazards increase the likelihood of accidents and injuries; as well as making workers more likely to be absent or to leave a business. It’s certainly contributing to our abysmal statistics as a nation, and more needs to be done to understand and address psychosocial hazards,” SaferMe founder and CEO Clint van Marrewijk says.

“Our team led by Dr Cantwell has taken a very thorough process to

examine these challenges in construction and other sectors, and we’re now helping businesses to measure these problems and fix them, “ van Marrewijk says.

CHASNZ Chief Executive Officer Chris Alderson says the study could help shape a better future for construction work.

“Robust evidence-based studies such as that undertaken by Dr Cantwell and SaferMe provide the construction industry with valuable insight into how to create a better future for our construction workforce. There are instant and implementable takeaways for construction businesses around the value of fostering collaborative and supportive workplaces as well as reducing known

psychosocial risk factors.”

SaferMe is now focused on helping further industries and individual businesses to measure and address psychosocial hazards in their workplace with its Safety Snap tool, developed with co-funding from ACC. Safety Snap is an evidence-based tool that helps a business understand the psychosocial challenges affecting staff on their worksites in less than one minute per week.

More information on Safety Snap is available at www.safer.me/features/ safety-snap/ Key Findings document is able to be downloaded from this link.

ELECTION 2023

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Industry leader in soft fall protection on construction sites Massey University rigorously tested all elements of the Safety Nets NZ system

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ith 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.

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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.

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

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propertyandbuild.com 45

ELECTION 2023

NZ workplace fatality rate is double Australia’s New Zealand is trailing seriously behind other countries in mitigating workrelated harm, a problem costing the country $4.4 billion a year, a new report reveals

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he State of a Thriving Nation report pulls together a range of economic and qualitative data to better understand this country’s health, safety and wellbeing performance.

It puts the total cost of lost lives, lost earnings and serious injury and health costs from work-related harm in New Zealand at $4.4 billion.

Produced by Sense Partners and Shamubeel Eaqub on behalf of the Business Leaders’ Health and Safety Forum, the report shines a light on our current performance as well as looking at two issues facing businesses in 2023; an economic slowdown and a general election – and how they play into workplace health and safety in this country.

“The report makes confronting reading. While we’re making progress as a country, it is too slow,” says Forum CEO Francois 46 propertyandbuild.com

Barton.

“If New Zealand could improve its performance to match that of Australia, we would reduce our costs to the country by nearly $1 billion per year,” he says.

“Fatality rates remain stubbornly high and are similar to those the United Kingdom experienced in the 1980s.”

When pulling together data and literature on how economic cycles affect health and safety outcomes, economist Shamubeel Eaqub says the causes of harm tend to be different at different stages of the economic cycle.

“When the economy is booming, there is too much busyness, which can crowd out good systems and processes, and culture. When the economy is weak, there can be a tendency towards cutting safety, training, and culture/wellbeing resourc-

es,” he says.

“We surveyed Forum members for a pulse check on the economy and business plans over the past year, and the year ahead. While the Forum membership is weighted towards larger firms, the results show that economic growth is expected to be moderate, but continue to grow, defying pessimism in many current surveys of business.”

“The survey also told us that businesses expect to continue making significant investments in capital, technology, and training, even more than in the last 12 months,” he says.

When considering the upcoming general election, the report calls for the new government to prioritize the importance of a level playing field through clear regulatory expectations on businesses and effective

follow-through and accountability.

“New Zealand’s health and safety performance is a nationally significant issue, and demands action from across government and business,” says Francois Barton.

“The Health and Safety at Work Strategy 2018-28 has not yet published a workplan – first planned for delivery in 2019, nor established any form of system oversight or governance.

This needs to be prioritized,” he says.

“We can, and must do better, as business leaders, government, and the regulators to change this economic and social toll to our people and our country.”

Read the full report

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ELECTION 2023

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

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orksafe 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.

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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

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ELECTION 2023

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

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ELECTION 2023

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ELECTION 2023

The great unlearning

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

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harboured 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 54 propertyandbuild.com

Click here for more information

Optimum Training manager Dwane Stewart with an eager team of learners 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

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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

Wayne Milicich 07 8583040 027 291 1829 www.otl.nz Representatives NZ wide propertyandbuild.com 55

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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.

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

A

year 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 56 propertyandbuild.com

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

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

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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

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Risk comes in many forms and certification helps over a variety of levels

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 58 propertyandbuild.com

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.

Philip Cryer is CEO of Telarc, a Crown Entity subsidiary with a vision to provide its clients with end to end, impartially audited Food & Wine and Management Systems Certification and Training services. www.telarc.org | 0800 004 004

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With your support we can continue to provide practical help, care and comfort.

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Visit cancer.org.nz to find ways to make a difference by volunteering, donating or taking part in our events.

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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.

Barry Dyer Chief Executive Responsible Care NZ

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oday, 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.

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

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-

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. 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.

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

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.

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

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 info@responsiblecarenz.com www.responsiblecarenz.com

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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

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he 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

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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 and mould treatments to prevent surface damage to roofs, ceilings, walls, floors and specialised equipment.

Team members Darren, Brandon and Akeli

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