Renters advocates and a builders association say the potential retraction of new insulation standards is a backwards step for the country.

The government has announced it wants to roll back insulation standards that came into force last year saying it adds between $40,000 to $50,000 to the cost of a new home.

Upgrades to insulation and glazing requirements in May 2023, known as H1 standards were the first significant improvements to insulation standards in New Zealand in more than a decade.

Building and Construction minister Chris Penk told Checkpoint new houses could include costs of $40,000 to $50,000 extra depending on the insulation standard they are held to, and after listening to what people want, he believes there should be more choice because of the need for affordable houses.

Certified Builders chief executive Malcolm Fleming says the organisation is surprised to hear the government is considering a roll-back of the standards and it doen't support such a move, given the changes have made New Zealand's homes more liveable and sustainable.

Building costs in New Zealand are too high, which stifled demand, so the industry understands the drive to reduce them, he says.

But New Zealand's insulation regulations remain below international standards and Fleming says the industry has been supportive of changes to improve them.

Fleming says talking to some of the organisation's 2350 members, it appears the H1 standard adds between $10,000 to $20,000 in costs for a standard home.

Costs of $40,000 to $50,000 are more likely on a home that's worth $2 to $3 million, he says.

"I'd be very interested to know who the minister has been talking to, because he hasn't been talking to the industry, he may have spoken to players within the industry but in terms of trade associations that represent the broader industry, they are not the people who've been providing him the figures that have been quoted.

"Given the savings in heating costs of about 40 percent going forward, it is a relatively small up front investment to be made for significant long term gain."

Certified Builders met with Building and Construction Minister Chris Penk last month to discuss how changes to the standards could reduce building costs without reversing the most effective components.

Building and Construction Minister Chris Penk has confirmed he is looking at rolling back a new standard designed to keep homes warm and dry that was introduced last year. Photo: RNZ / Samuel Rillstone.

Fleming says that can include changes to wall and ceiling insulation requirements, window flashings and materials and slab perimeter insulation.

Overheating issues can occur because of insulation, if houses are not designed to have adequate cross ventilation or windows are north facing and have a lack of shading, issues that are fixable through design work, he says.

There has also been significant investment by the government and the industry to ensure builders were prepared for the new standards when they were introduced last May, Fleming says.

Joinery manufacturers have also invested heavily in new plant and machinery to produce thermally efficient windows and thermally broken window frames that are critical to meet the H1 specification.

"They did that because the demand was guaranteed as it was regulated... and if there was a u-turn on H1, demand would evaporate which sends a sorry signal to the business community who've ramped up on the basis of having to do so."

Renters United spokesperson Zanian Steele says the proposal appears to be a politically motivated "knee-jerk reaction" that detracts from many of the housing related policies of the previous government.

The announcement comes on the back of the return of 90-day no clause evictions and feels like a sustained attack on renters, to rival what has been described as the last government's war on landlords - a rhetoric Steele says is "quite unproductive".

It's concerning that there appears to be a trade-off between healthy homes for tenants and affordability, Steele says.

"We know that mouldy and damp homes are a major source of healthcare problems and we know that tenants tend to suffer more from housing related health issues than either owners or landlords."

Steele says reducing insulation standards might save costs when it comes to building, but it creates a burden for the healthcare system and resultes in reduced productivity.

"In the long run we are going to see many, many New Zealanders renting intergenerationally, we have something like 1.7 million renters across the country and protecting them is essential because many of those people will stay in rental properties for the rest of their lives... so it becomes more of a health issue when you consider it through that lens."

Steele says the standards have only been in place for a year, which is not long enough to draw any major conclusions.

Public feedback during the initial consultation for the standards showed overwhelming public support for better insulation, while tenants had been making noise about unhealthy homes for some time.

Steele says it'as a non-partisan issue, as no government wants renters to suffer ill health, or homeowners to be stuck with properties unsuitable for habitation.

-RNZ.