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The Clayton Avenue project was completed in May and is part of the Auckland Housing Programme (AHP), a joint initiative between Housing New Zealand and HLC to deliver small, medium and large-scale housing developments in Auckland over the next 10 years

Future-proof – seven trends coming to the NZ construction industry in 2019 – By Gary Caulfield

The local industry is abuzz with talk of KiwiBuild, and certainly, with tenders now out to market for large-scale, long-term projects under the NZ government’s 10-year plan, contractors, subbies, manufacturers and suppliers have good reason to start pointing their business plans in that direction.

But there’s much else to be excited about and to prepare for as we head towards the close of another year, and my visits to several recent global industry conferences have enlightened me about some extraordinary opportunities that our local industry should be getting ready to seize. Read on for the top trends coming to the New Zealand construction industry in 2019 and beyond.

1. The gradual emergence of a long-term build-to-rent culture

It’s hard for Kiwis to believe that there are many developed countries where owning a home is neither an expectation nor a desire for middle-class citizens. I would argue that part of creating a stable long-term property market that isn’t overvalued or contributing to inequality is to adapt the current construction boom to drive a new culture of build-to-rent.

If, as the data suggests, today’s millennials aren’t going to own a home unless they have wealthy parents, the culture needs to change so lifelong renters have both security of tenure and the freedom to make a home their own. Singapore is a good example: there, 10% of citizens own their home and the remainder rent their homes, with the government being the biggest landlord.

Legislation is in train here in NZ to give greater protection to tenants and impose more responsibility on landlords, and this step in the right direction would be taken further with more public ownership of property beyond Housing NZ – and this might include long-term landlord partners to government who would be subject to oversight and caveats on property holdings. A more stable system would be infinitely better for renters and owners alike.

2. Collaboration will become integral to strategy

Historically there’s been competition between steel, concrete and timber owners and producers, but the scale of the challenge here in NZ, along with recognition of the shared opportunities, is proving that all three sectors need each other in order to thrive – and there’s more than enough work to go around!

We are in talks with steel producers and looking at various partnership options, and expect to see many more collaborative models as these long-term projects take off.

3. Artificial intelligence (AI) will become a crucial tool for designing, planning, pricing and training

I have seen AI models that put consultants on scaffolding and allow them to take a walk around a construction site and through a building – without ever leaving the meeting room. These virtual tools are about to become invaluable, not just for architects and quantity surveyors, but in training (think about the possibilities for apprenticeships) and health and safety – to derisk projects from every possible angle.

We are currently trialling AI for training purposes related to our cross-laminated timber (CLT) product, and are finding it’s a good sales and marketing tool as well. With this kind of ace up their sleeve, potential customers don’t have to take a manufacturer’s word for the performance of the product; they can see how it would work in their own project before making the commitment.

4. The role of banks will need to shift

Under current guidelines, banks will not lend on very small homes (those under 50 sq m). With KiwiBuild and other developments encompassing an enormous range of property types, a certain type of apartment design – for which there is a demand – will be stymied. However, many overseas examples prove this would be short-sighted: a new development in Brooklyn, New York, features ‘micro units’ or studio apartments of around 35 sq m that come with space-saving furnishings and attractive common areas and amenities that compensate for less private space.

The new Brooklyn building, for instance, features a lending library open to all tenants, with dozens of items, including a porcelain dinner service for 12, a ladder, a sewing machine, a guitar with an amp and an ice-cream maker. The philosophy is to create more efficiency and reduce consumption while also fomenting happy social interactions of the type we used to have with our neighbours. If banks don’t decide independently to support this type of development, the Reserve Bank and the government should weigh in.

5. Insurers are likely to make some hefty changes

In New Zealand, developments rely on banks, resource consent and ultimately council approvals – if you have all those ducks in a row, you can more or less do what you want. But in the UK, insurers are the ultimate arbiter, right down to specifying which materials can be used – and there is a push, not just towards safety, but also sustainability.

Everyone in the construction sector should prepare for the model to head this way as well, especially with reinsurers paying a lot more attention to our wee isles post-earthquakes.

6. CLT is being recognised for its innovation and value in new home design

XLam’s six wins in the 2018 Timber Design Awards prove my earlier point about collaboration: while innovation in timber is becoming ever more valuable in construction, and the sustainability advantages are inarguable, part of the innovation is coming from inventive ways to blend timber with steel and concrete in a diverse array of building types. Which leads me on to the next point …

7. Timber hybrid is the new buzz phrase

It’s as basic as a hammer and nail – two pieces of timber can’t fit together without a piece of steel in some form. Given that one of the most attractive elements of CLT is that all the work is done offsite, so once on a construction site it’s a pure build (saving time, labour cost, and risk), starting to create hybrid products at the offsite stage is a no-brainer.

This also ties into the advances of AI, which allow trial and testing at minimal cost and no risk. There is a great deal of experimentation going on with hybrids and composite materials around the world, and in the UK we are seeing buildings of eight to 15 storeys going up with light-gauge steel framing and a CLT floor, in place of the traditional concrete base. It’s revolutionary, and proof of how well steel and timber can work together.

Gary Caulfield is the CEO of XLam, the leading manufacturer of cross-laminated timber (CLT) in the Southern Hemisphere xlam.co.nz


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