A construction site of high-rise buildings is seen in the middle of the city in Shenyang, Liaoning province October 16, 2014. China's economic growth slowed in the third quarter to its weakest since the 2008/09 global financial crisis as a slumping property market dragged on manufacturing and investment, adding to concerns about flagging global growth.
New Zealand's Labour Party has alleged that the Government's much trumpeted plan to lower building costs by way of slashed import duties has floundered. Housing Minister Nick Smith denied the allegation raised by Phil Twyford MP. He asked the parliament member to check the relevant figures and data.
Not backing down, the Labour MP retorted with a call for an inquiry into the rising costs of constructing houses in New Zealand, reports 3 News. In the total costs involved in building a new home, half of it is consumed by building materials. That is why the government's initiative was keenly watched.
It was in 2014, the Government scrapped tariffs and duties on a majority of imported building materials hoping that it would cut down the cost of building a home by $3500. Twyford took potshots at the claim and said, "Nick Smith promised to save the Kiwi home buyer $3500. What he is now going to save is about the same or less than one day's house price inflation in Auckland." The MP said the saving would be just $73.
The Housing minister replied that the Labour MP needs to cross check his figures. "I think Twyford is typically tricky and talking about the removal of tariffs that occurred on the first of July 2014 and has based his questions on just two months of figures", added Smith.
The minister reasoned that it takes time for suppliers to source materials offshore. So, the promised 75 percent of the savings will not kick in until a bill in Parliament is passed. Despite the minister's logic, Twyford asserted that New Zealand's building costs are unreasonably high.
Expensive than Australia
The MP raised specific product prices to prove his point. According to the MP, the New Zealand price of plasterboard is 40 percent higher than that of Australia's prices. He called for a full Commerce Commission investigation into the building supplies market and asked the Government to stay away from it.
But the housing minister said the Government does not have any magic bullet to solve the issue of housing affordability. The issue is connected with infrastructure costs, building material costs and land supply. However, the minister said more and more importers are benefiting from the reduced import tariffs.
Fletcher Building Claim
Meanwhile, New Zealand's leading company Fletcher Building, operating in the segment of building products, claimed that residential construction in New Zealand is doing well. Its Chief executive Mark Adamson rejected Labour's claim that building materials cost in New Zealand is too high because of subdued competition, reports 3 News.
Adamson said the supply chain makes a lot of impact on pricing. Also the size of the population and its spread and density are vital factors. Within New Zealand these issues vary, when compared to Australia, the CEO said.