New Zealand’s residential construction industry contributes roughly NZ$26 billion annually to the economy and employs around 70,000 workers. Yet despite its significance and scale, the sector’s productivity levels have flatlined since the mid-1980s.

In housing construction, “productivity” isn’t a simple measure of output per worker; it refers to the industry’s ability to deliver the right quantity of high-quality homes without significant delays or flaws.

If a builder spends ten hours rectifying avoidable mistakes, for instance, their productivity for the day is effectively zero. And this has become all too common within the sector.

A 2014 study by the Building Research Association of New Zealand (BRANZ) confirms 92% of new houses surveyed had compliance defects.

Subsequent analysis carried out for BRANZ by the New Zealand Institute for Economic Research estimated the annual cost of defective building to the overall economy:

The results show that economy-wide effects of an increase in productivity would see New Zealand’s GDP rise by $2.5 billion, as the industry’s overall costs of production decrease.

That means nearly 10% of the sector’s total value is lost to systemic quality failure. Based on the average construction cost of an Auckland house, that loss represents around 5,000 missing homes every year.

Recognising the productivity problem, the government last year introduced major reforms aimed at........

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