New Zealand is planning to limit skyrocketing prices within the country’s building industry by hiking competition and easing access to the market for new and alternative products.

The government announced the plans following a series of proposals put forward in a Commerce Commission report unveiled on Tuesday regarding residential building supplies.

The findings in the report by the competition watchdog said the introduction of new building products and methods needs to be more streamlined, as well as competing suppliers having the ability to grow their businesses.

“It’s harder for alternative products that offer consumers a choice to get into or expand in the market,” said Building and Construction Minister Megan Woods. “We welcome these findings and will consider the recommendations to understand what changes are necessary to help increase competition and ultimately bring down costs for consumers.”

Soaring business costs have played a major part in the country’s red-hot inflation rate, which hit a 30-year high in 2022, and led the central bank to adopt an aggressive monetary policy tightening stance. 

Even though supply chain issues and labour costs have impacted the building industry, a lack of competition in the supply of key products has fuelled cost pressures, Bloomberg reports.

The government requested the Commerce Commission to begin the market study at the end of last year. The Building and Construction Minister added that it would respond to the suggestions by next March.

According to the watchdog, two issues made competing products tough to enter the market. The first is a regulatory system that favours familiar products, along with rebates paid by suppliers to merchants depending on the purchase volume.

The regulator added that exclusive leases and land agreements impede greater competition.