Fixing unhealthy homes would hit GDP growth, but benefit families - report

A massive investment programme to fix the country's unhealthy homes would drive $116 billion worth of benefits to households, despite a hit to economic growth, according to a new report.

Business and Economic Research Limited (BERL) looked at overseas retrofit programmes such as one used in the Republic of Ireland, which could be replicated in New Zealand.

The report was commissioned by the Building Research Association of New Zealand (BRANZ).

It looked at three scenarios, with the cheapest retrofit programme estimated to cost $26.6 billion, the middle ground option $42.3b, and the most expensive $58.1b.

In all three scenarios, the country's gross domestic product (GDP) would be lower in 2050 compared to a business-as-usual forecast, where no retrofit programme was implemented.

In the most expensive scenario GDP was forecast to be 3.1 percent lower, the middle 2.2 percent lower, and in the cheapest scenario, 1.4 percent lower.

BERL said that was because as demand for residential construction increases for a retrofit programme, the investment in, and output of all exporting industries, would decrease.

Senior consultant Nick Robertson said despite the decrease in GDP, households would see $116b worth of benefits.

"These come through benefits to health, productivity as well as energy use."

He said while GDP often took the headlines, it was not a great measure of economic performance.

"It does only look at the economy as a whole, it doesn't consider the flow-through that GDP then has - it doesn't show that it could be concentrated around 10 percent of the population or is it going out to 90 percent of the population."

Robertson said this research showed household incomes increased as a result of the benefits of the retrofit programme.

"We know that when household incomes increase, they're able to increase their own spending and so this will generate economic impact in its own sense domestically."

He said while economic benefits were important, a retrofit programme was an investment in New Zealanders' health.

"[Imagine] the things that could be done when we're not spending money on treating the types of illnesses that can be prevented by having healthier homes."

There would also be productivity gains from having less instances of things such as looking after sick children or relatives, Robertson said.