Commerce Commission investigating high cost of residential housing building supplies


The government is reviewing the high cost of building supplies for the residential market.

Minister of Commerce and Consumer Affairs David Clark says there have been long-standing concerns about whether there is enough competition in the sector.

Good housing underpinned a range of social, economic and health outcomes and it was critical New Zealanders had access to fairly-priced building supplies, Clark said.

"Understanding any market barriers could play a key role in supporting New Zealanders achieve home ownership, so I'm pleased the Commerce Commission will be getting this work underway.

"It's clear a significant portion of the costs associated with building residential housing is tied to building supplies. As New Zealand's population has increased over the last decade, residential building consents have more than tripled. Alongside that, current demand for renovations and extensions to existing homes is at the highest it's been in 15 years."

The Commerce Commission will present its final report on the issue early next month.

The commission will consider a range of issues including the following:

  • The industry structure for key building supplies covered by this study
  • The nature of competition for these key building supplies, including any industry pricing practices or acquisition requirements that impact on competition
  • Impediments to the entry or expansion of new or innovative building supplies, such as 'green' building supplies or novel prefabricated products

Similar market studies found motorists are paying higher petrol prices due to a lack of competition while a study into the supermarket sector is due to be completed in March.