House building crisis: Government could limit timber exports to ensure local supply

The Government was warned its efforts to tackle New Zealand’s housing affordability issues could be hampered by wood shortages.

The issue has become so significant, Building and Construction Minister Poto Williams is considering limiting timber exports to ensure there is enough in the country.

It’s also caught the attention of Green MP Chlöe Swarbrick, who this week intends to call for a select committee inquiry into building products, with a specific focus on timber.

This comes as the cost of building materials continues to rise, pushing up house prices.

Newstalk ZB can reveal the alarm was raised in April, in an urgent briefing from Ministry of Business, Innovation and Employment officials.

Documents, obtained under the Official Information Act (OIA), show officials’ concerns after timber giant Carter Holt Harvey cut distribution to ITM, Bunnings and Mitre 10.

At the time, the building materials company was forced to scale down the sale of its timber stocks, citing supply issues.

According to the OIA, it still maintained relationships with Placemakers and its own subsidiary, Carters.

Despite this, officials were troubled about the impact of the decision on the housing market.

The briefing shows there were concerns smaller companies impacted by Carter Holt Harvey’s decision would ration their timber supplies, leading to price increases.

“If demand for building materials continues to grow, constraints on the ability of domestic wood processors to increase production may act as a handbrake on New Zealand’s housing driven recovery from Covid-19.”

That worried Building and Construction Minister Poto Williams, who admitted this was an issue – given the Government’s plans to build more houses.

She told ZB options include potentially limiting wood exports going forward, to keeping some construction materials from going offshore.

Williams is in the process of getting advice from the Construction Sector Accord, before presenting Cabinet with options.

She said was “no doubt” the industry’s facing shortages.

“Yes, we acknowledge there’s an issue, but there’s work happening, and what we’re doing is still continuing to build houses”, she said.

National’s building and construction spokesman Tim van de Molen said Williams has missed an opportunity to demonstrate leadership.

“The industry’s pulling out all the stops … they just need to see a little bit more support”, he said.

“You don’t live in a consent, and you can’t build houses without timber.”

Green MP Julie Anne Genter agreed the shortage was concerning.

“It’s an urgent situation … but there aren’t going to be any short-term quick fixes,” she said.

“My colleague Chlöe Swarbrick will [this week] propose that the Finance and Expenditure Committee take an inquiry into building products, and specifically timber.”

After initial inquiries, the Commerce Commission said it found no evidence that Carter Holt Harvey had breached the Commerce Act.

A spokesperson said the Commission “intends to continue to engage with relevant parties in the supply of timber to understand any developments.”

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