Government to monitor building supply prices, ministers announce

By Russell Palmer of RNZ

Building supply prices will be monitored by the government in response to the Commerce Commission's building supplies study, Ministers have announced.

Land covenants across the entire economy will also be reviewed.

It's part of the government's response to the Commerce Commission's final report in its Building Supplies Market Study, delivered in December.

The government has largely agreed to eight of the commission's nine recommendations and said it would go further on three, with the only recommendation not taken up - to promote compliance with the Commerce Act - fitting "within the commission's current work programme".

One of the eight recommendations agreed to, seven were agreed in full with one - introducing competition as a regulatory objective - agreed "in principle" and will be considered as part of the Building Consent System review.

The government said it would go further on this measure, by requiring MBIE to monitor building supply prices.

In a statement, Building and Construction Minister Megan Woods thanked the commission for its work, saying the finding that competition was not working as well as it could needed to change.

"We need to remove market barriers that make it hard to introduce new building products and for competing suppliers to expand their businesses. This drives up costs and means homeowners end up paying more than they should. At a time when the cost of living is hurting families, that needs to improve."

Commerce and Consumer Affairs Minister Duncan Webb said the government would also soon begin consultation on a broader review of land covenants covering the entire economy, after they were also identified as a problem in previous market studies.

"These types of land agreements can be used in a way that make it harder for new businesses to enter a market, or for existing businesses to expand, and that can impact on competition. We have seen this in three markets now - building supplies, retail fuel and groceries," he said.