Infrastructure and construction pipeline critical to maximising housing investment

March 23, 2021


“The new $3.8 billion Housing Acceleration Fund will help address short to medium term infrastructure barriers to housing, but only if it is integrated with a visible, committed and sequenced pipeline of projects that encourages industry to invest, scale up and lift construction sector productivity,” says Hamish Glenn, Policy Director at Infrastructure New Zealand.

“The Government has announced a raft of supply and demand side measures to address rapid property price inflation, including changes to the brightline test, increases to first home buyer caps and removal of interest deductibility for property investors.

“Pleasingly, the Government has committed a very significant $3.8 billion to overcoming infrastructure barriers to new housing developments and provided a further $2 billion debt facility to Kāinga Ora.

“However, while this investment is urgently needed and will be widely welcomed, there is a risk that new investment starts competing with existing commitments to the NZ Upgrade programme, shovel ready projects, rising three waters commitments and other critical initiatives.

“To avoid competing for the same fixed pool of labour and other resources, it is extremely important that visibility of the forward work programme is improved.

“Designers, architects, contractors, subbies and the raft of other critical service providers who take each project from idea to reality need to understand what’s coming up not just in the next 6 months, but over 3-5 years and beyond if they are to invest in the systems, skills and capacity to meet a growing workload.

“For this reason, it was also very positive to see in today’s announcement that the Government will boost apprenticeships.

“But the sector still needs better clarity of when projects will be brought to market and confidence that timeframes and priorities will be predictable.

“Project sequencing which avoids market participants from competing for the same pool of labour and which encourages companies to invest in training and productivity is critical, as is progress on getting skills which can’t be sourced locally into the country.

“New Zealand’s infrastructure and construction sector can meet the challenge, but can meet it faster and more affordably with a clearer sightline of the programme ahead,” Glenn says


For further information and comment contact Hamish Glenn on 021 034 7229