Poor productivity in the construction sector is part of the reason it costs a third as much again to build a standard home in Auckland compared with Melbourne or the Gold Coast.
But the Productivity Commission has little to offer by way of solutions other than a "keep up the good work" message to an industry/government partnership set up last year to address the issue.
The commission's report on housing affordability, released yesterday, noted that productivity growth in the New Zealand construction sector had flatlined over the past 20 years, underperforming other sectors here and its peers in Australia and Britain.
It highlights three factors behind that: the difficultly of achieving economies of scale, skill shortages, and too little innovation. It contrasts a "cottage industry" dominated by small, often one-man firms building mainly customised standalone dwellings with Australia, where large firms, building more than 100 homes a year, have twice the market share and more than a third of the homes built are multi-unit dwellings.
"The industry accepts it has a problem with productivity," commission chairman Murray Sherwin said. And it understood it has big surge in work ahead in the rebuilding of Christchurch, the repair of leaky homes and pent-up demand from the slump in residential building over the past three years.