Economist urges housing sector to build 'smarter and cheaper' homes

Housing sector needs to be “a lot more open, a lot more innovative”

Economist urges housing sector to build 'smarter and cheaper' homes

An expert is urging New Zealand’s housing sector to focus on building “smarter” homes to make them more affordable in the long term.

Speaking at the 2019 Architectural Design New Zealand conference in Queenstown last week, ASB chief economist Nick Tuffley revealed the “very, very strong” need to build smarter and cheaper homes in the country.

“It's one of the things, I think, under the new Government we are seeing a lot more of a push into being a lot more open, a lot more innovative in trying to figure out how we can support ways of building smarter and cheaper,” Tuffley said, as reported by Otago Daily Times.

“But when we're looking long-term, how do we make housing more affordable? There's a lot of structural changes that we've started looking at harder, but we need to focus on going forward around how we build.”

Read more: The New Zealand economy is under pressure – ASB

Tuffley also advised delegates at the conference to focus on other property issues, such as zoning, land-use regulations, and red tape.

"We probably do need to have a look at our regulation and also the length of time it can take to get projects through, because uncertainty means risk,” he said.

He also noted that New Zealand is now entering a “new, unknown territory” where the official cash rate (OCR) is only 1% with an expectation to further drop to 0.5% early next year – affecting floating and fixed-term interest rates.

“From a financial perspective, housing affordability has been getting a little bit better recently and that's because of these dramatic drops in interest rates. We do think with interest rates falling we will get a little bit of a second wind in the housing market, or a third or a fourth wind in some markets,” Tuffley said.

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