New Zealand Public-Housing Project Tender Price Forecast: Preliminary Findings

Abstract

To make house prices affordable to first-home buyers on low-to-medium incomes, one of the solutions is the capped cost of public-housing projects. The accepted tender price forms the major portion of final project cost, and the level of the accuracy of the project’s tender price determines the possibility of achieving the cost cap. Hence, exploring and developing effective tender price forecasting tools is worth researching. To achieve this goal, the literature suggests that an understanding of the tools and factors affecting the accuracy of public-housing tender price is crucial. There is little to no research into tender price forecasting tools and the factors affecting the accuracy and efficiency of public-housing tender prices in the context of Tāmaki Makaurau Auckland, Aotearoa New Zealand. This research aims to fill some of this gap. It is a first step in an ongoing programme of research that aims to develop a public-housing project tender-forecast tool. The research aims to identify the possible tender price forecasting tools and the factors significantly affecting the accuracy of public-housing project tender prices in the context of Tāmaki Makaurau Auckland, Aotearoa New Zealand. Preliminary interviews were carried out. The sample was limited to experts with at least five years’ public-housing tender experience in the Aotearoa New Zealand context. The frequency method was adopted to carry out data analysis. All preliminary interview participants agreed that material cost, labour cost and quality of design information were the top three factors significantly affecting the accuracy of the tender price. The research identifies loopholes in the current public-housing project tender practices in the context of the Tāmaki Makaurau Auckland public-housing sector. The main contribution of this research is providing insights for public-housing project cost estimators who aim to balance the accuracy of tender price and the efficiency of tender process, by using the research findings to select the appropriate tendering forecast tools. The research also provides a base for future research to develop tender forecasting tools by using information gaps and current industry practice findings. The data collected from this preliminary research are subjective; participants measured the importance of factors based on their own subjective opinions. There is no guarantee that the data collected fully reflect the opinions of the whole public-housing sector in the context of Tāmaki Makaurau Auckland. To overcome this limitation, the researchers will develop a questionnaire, and invite more eligible experts to complete questionnaire as the next research step.