- Hon Chris Bishop
Good morning, everyone.
It's great to be here in beautiful Queenstown.
I'd like to thank Leonie Freemen and her team at the Property Council for hosting this event.
I believe it's crucial to get developers, property owners, financiers, contractors and the broader property community in the same room.
You guys get stuff done.
My hope for this conference is that you all have great conversations that lead to innovative ideas, new partnerships, and new projects.
I'm told this year's conference is about navigating and adapting to market cycles and capitalising on opportunities.
I think opportunities for economic growth and development is increasing. I see a lot of opportunity in this room.
If people leave here having met someone they can work with or having thought of a better way to do things, then that is a massive success.
Lay of land
But I won't sugarcoat things. Times have been tough over the last few years.
In 2021, inflation was rising fast, and in 2022 it was out of control - peaking at a record-high of 7.3%.
For companies and people developing property - like you - inflation for construction was even worse - peaking at above 18% in 2022. And that doesn't even include labour costs.
To get inflation under control and cool our overheated economy, the Reserve Bank lifted the Official Cash Rate, and the Government has put in place strong fiscal management.
I know the construction and property sectors are particularly sensitive to higher interest rates and acknowledge that it's been tough moving through the economic cycle.
New Zealand has taken a difficult road to the trough, but I do believe we are now at or near the bottom of the cycle.
We've gotten through this before.
For instance - post the Global Financial Crisis in 2008, building consents fell to a low of 13,616. Post this economic dip, building consents only fell to 33,467.
I think this shows two things -
The first is that we have moved to a higher baseline for construction.
The second is that the Government has taken meaningful action to eliminate system blockages to make it easier, faster, and cheaper to build now.
Minister Penk has done fantastic work in removing red tape in this space
Since July this year, tested and quality overseas building products have been given the green light for New Zealand.
So, if products including plasterboard, cladding systems, windows, and external doors meet trusted international standards - those products can be used in construction here too.
In April, we began the process of making common-sense changes allowing qualified builders, plumbers, and drainlayers to opt-in to self-certify their own work - cutting inspection times.
And, just two weeks ago, the Government announced our plans to ease the cost burden on ratepayers for defective building work.
Right now, councils are hesitant to sign off on building consents and inspections because they could be held liable for all defects, leaving ratepayers to foot the bill.
The risk-aversion this creates leads to frustrating delays and extra cost for builders and homeowners.
So, we are scrapping the current framework, known as joint and several liability, and replacing it with proportionate liability - which is common in other jurisdictions.
Under this new model, each party will only be responsible for the share of work they carried out.
Building owners will be protected if things go wrong, and we're exploring options such as requiring professional indemnity insurance and home warranties, similar to arrangements in Australia.
To make the building consent process easier, we are also allowing councils to voluntarily consolidate their Building Consent Authorities - or BCA - functions with each other.
It's ridiculous builders, designers, and property owners must navigate 66 different interpretations of the Building Code, because of the number of council BCAs across the country.
Many councils have asked for this, and I expect they will seize the opportunity to consolidate - making the system more efficient and passing on savings to ratepayers.
Now - all of these changes, together with lower interest rates, are helping the sector recover and grow.
And, I have seen promising green shoots.
Since August 2024, the Reserve Bank has been steadily cutting the OCR and interest rates have been decreasing.
Construction costs are steady, giving developers greater certainty on price. The average cost of constructing a standard home has risen 0.8% in the last year - a sharp contrast to the 44% increase seen between 2020 and 2024.
Right here in Queenstown, residential building consent numbers are at a record high, with 1,490 dwellings consented in the year to July 2025.
I was also very excited to see Simplicity's plans to develop up to 600 build-to-rent homes on Ladies Mile in Queenstown.
Simplicity's Chief Economist, Shamubeel Eaqub, said that "the conditions to make this kind of investment have never been better because the Government is backing enabling planning rules and there is confidence the infrastructure required for development is being sorted."
I think build-to-rent is a much-needed housing option that offers long-term, secure rentals for those looking for more stability.
In my view, the landscape for development is only going to get better because we have two game-changing reforms underway:
- Our Going for Housing Growth programme that is focused on fixing our housing system, and
- Resource Management Act (RMA) reforms that is focused on fixing the planning system.
These reforms will take some time to bed-in, but it's what New Zealand needs so that all kiwis can be so much better off than we are today.
I'll go over where we are at on both of these reforms, then I will briefly touch on City and Regional Deals.
Long-term reforms
Going for Housing Growth
Let me start with an update of our Going for Housing Growth programme.
There are pillars:
- Pillar One: freeing up land for development and removing unnecessary planning barriers,
- Pillar Two: improving infrastructure funding and financing to support urban growth, and
- Pillar Three: providing incentives for communities and councils to support growth.
Last month, we concluded public consultation on Pillar One. We asked the public how "freeing up land for development" should be integrated and operationalised in the new Resource Management system.
Thank you to everyone who provided feedback, including the Property Council.
Officials are looking through the submissions and will report back to me shortly.
Rest assured, Pillar One - which includes live-zoning 30-years of housing demand, enabling mixed-use developments, and abolishing minimum floor areas - will be ready to go for Councils' 2027 Long Term Plan cycle.
Now let's talk about Pillar Two.
Earlier this year I announced five changes to our infrastructure funding and financing toolkit to get more houses built.
- The first is replacing Development Contributions (DCs) with a Development Levy System, where growth pays for growth.
- The second is establishing regulatory oversight of these Levies to ensure charges are fair and appropriate.
- The third is increasing the flexibility of targeted rates.
- The fourth is amending the Infrastructure Funding and Financing Act (IFF Act) to make it easier to use.
- The fifth is broadening the IFF Act so that beneficiaries can help pay for major transportation projects.
At a high-level, these changes will help create a flexible funding and financing system to match our flexible planning system.
Pillar One is about flooding the market with development opportunities. Pillar Two is about ensuring the timely provision of infrastructure to ensure houses can actually be built.
It's an obvious point but, you can't have housing without water, transport, and other community infrastructure.
We have heard from the sector that it is critical to get infrastructure funding and financing right - and I agree.
The Government has done lots of consultation with local councils, and feedback has been positive. But we need to engage more with the sector.
Responsible Ministers are exploring options to ensure the development community has the time required to get across the new infrastructure funding and financing toolkit - particularly the new Development Levies system.
I want key users of Levies, like you, to have confidence that they will be fair and work as intended.
The shift from Development Contributions to Development Levies is a once in a generation change to how we fund infrastructure and enable housing growth. It's really important to get this right, and we want to hear from you.
To kick this off, I will be meeting with the Property Council today to discuss the new Development Levies system.
On Pillar Three, officials are working away on this, and we will have more to say later.
Resource Management Act Reform
Now, moving onto RMA reforms.
The way I see it, there are three critical things in the new Resource Management system that will be transformational for the property sector.
The first is a narrower approach to effects management based on the economic concept of externalities. Effects that are borne solely by the party undertaking the activity will not be controlled, while financial or competitive matters will be excluded.
For example, you will no longer have to argue with your local councils about doors being in a certain place, how your living room should look or whether you provide a balcony.
The second is greater use of standards. Nationally set standards, including standardised land use zones, will provide significant system benefits and efficiencies.
The new legislation will provide for greater standardisation and ensure that policy setting happens at the national level, while local decision is enabled for the things that matter.
New Zealand does not need 1175 different types of zones. In Japan, which uses standardised planning, they have only 13 zones.
Over time, the construction industry will orientate towards these standardised zones, driving efficiency and lowering cost.
The third big change is spatial planning. Spatial planning done right will enable housing and business development in places where constraints can be avoided or appropriately managed, as well as support early protection of infrastructure corridors and strategic sites, lowering the cost of infrastructure.
It will give you the certainty you need to plan for your long-term development pipelines.
We are carefully working our way through the development of the relevant legislation now, and plan to have two new Acts to replace the RMA in the House by the end of the year. It will become law next year, and councils will begin work on their first plans under the new system after that.
As members of the development community, you have a huge part to play in providing feedback and ideas on how the new system can work - especially because you will be the ones operating in it.
We need a practical resource management system that will drive economic growth and increase productivity by making it easier to get things done in New Zealand.
I look forward to your feedback and to discussing your ideas as part of the select committee process, as we continue to create a better resource management system for everyone.
Local Government - City and Regional Deals
Lastly, I just want to quickly touch on City and Regional Deals (CRD), which are strategic 10-year partnerships between Central Government and Local Government to mutually progress our priorities.
The Government is currently in negotiations with Auckland, Central Otago, and Western Bay of Plenty. So, in good faith, I can't say too much!
What I can say is - Central Government has been clear about our objectives, as well as what we want local government to bring to the table.
Through CRD, we want to achieve five objectives:
- Better co-ordination, including improving how we work together with council
- Unlocking cities' and regions' unique potential and lifting economic growth.
- Making room for housing growth.
- We want local governments do a better job at manging and utilising their asset base and for them to make significant progress on closing their infrastructure deficits.
- We also want local governments to comprehensively adopt our priority reforms such as Local Water Done Well, Resource Management Act, and Going for Housing Growth.
To achieve these objectives, we want local government to (among other things):
- utilise existing infrastructure funding and financing tools like Targeted Rates and IFF Act Levies, and upcoming tools like Development Levies and Time-of-Use Charging;
- undertake an asset recycling programme to help fund infrastructure needs;
- go above and beyond "minimum requirements" in law, which could include upzoning around significant government investments in infrastructure; and
- demonstrate a credible plan for economic growth.
City and Regional Deals are a great way to align national and local priorities and to get some exciting (and less exciting, but still important) stuff done.
On next steps - we will be signing one deal by the end of this year, and two more deals in 2026.
Conclusion
If you take nothing else from me today -
I want you to leave knowing exciting stuff is getting underway, there are green shoots, and there are lots of opportunities - particularly in the property and development sectors.
I also look forward to hearing your thoughts on development levies, IFF Act changes, and RMA reform.
Thank you.
