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  1. #71
    Join Date
    Jun 2004
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    10,404

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    Quote Originally Posted by Ogg View Post
    Here's a good example of a NZ company using technology and innovation to reduce the cost of selling a house in NZ.

    https://www.arizto.co.nz/assets/Videos/Arizto-19C-1080.mp4


    Notice how they centralize all the work and outsource what's needed.

    Simple, efficient, smart.

    Average cost to sell a house in Auckland with one of the major estate companies, like Barfoots, Balayes, etc is $35k.

    Imagine something like this but for builders/contractors.
    Have all the agents taken this on?
    What you are expecting is for all builders to take it on.
    What you propose is dreamland stuff - very anti-competative for a start.
    You assume that this 'company' will price for the good of all rather than take advantage of their monopoly situation.
    Only a Govt could do this and you really don't want to go there. (We could call it the Ministry of Works.)

    And I ask again - why stop at builders?

  2. #72
    Join Date
    Oct 2014
    Posts
    47

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    Quote Originally Posted by Wayne View Post
    Have all the agents taken this on?
    What you are expecting is for all builders to take it on.
    What you propose is dreamland stuff - very anti-competative for a start.
    You assume that this 'company' will price for the good of all rather than take advantage of their monopoly situation.
    Only a Govt could do this and you really don't want to go there. (We could call it the Ministry of Works.)

    And I ask again - why stop at builders?
    Why do you think there's been such low wage inflation over the last 30 years. It's because things like this are happening.

    It just hasn't happened in the building sector yet.

    How is this anti-competitive? It's the exact opposite.

    It's like saying Google is anti-competitive, even though you get heaps of free stuff from them and they have lowered the price of almost everything.

    You can't stop it. Things like truck driving jobs are being automated soon.

    Just don't give me this rubbish that it's a supply/demand problem. Or that builders some how deserve to be paid twice as much as nurses and teachers.

    Builders are over paid. Period.

    Stop bring the government into this. Everybody knows they're useless and do nothing but make things go backwards.

    What's needed is more capital. To create large companies that can actually do something about the high prices.

    There are small steps happening. Like pre-fab and offsite manufacturing.

    Here's another example of an innovating company reducing the cost of bricklaying:

    https://www.youtube.com/watch?v=5bW1vuCgEaA

  3. #73
    Join Date
    Jun 2004
    Posts
    10,404

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    Quote Originally Posted by Ogg View Post
    Why do you think there's been such low wage inflation over the last 30 years. It's because things like this are happening.

    It just hasn't happened in the building sector yet.
    There hasn't been low wage inflation for 30 years - 10 maybe.

    How is this anti-competitive? It's the exact opposite.

    It's like saying Google is anti-competitive, even though you get heaps of free stuff from them and they have lowered the price of almost everything.

    You can't stop it. Things like truck driving jobs are being automated soon.

    Just don't give me this rubbish that it's a supply/demand problem. Or that builders some how deserve to be paid twice as much as nurses and teachers.

    Builders are over paid. Period.
    It's anti-competative because you want one outfit to control the price of an entire group of workers.
    Once they can do that then they can ramp the price up also.
    I don't need to stop it for builders because it will NEVER get started. Mate, you're dreaming.

    Builders are in a totally competative environment now - they charge what they can get (same as landlords) - so they are worth what they are worth.
    You want a builder you pay the going rate. Become one yourself rather than bitching about it or maybe you don't have the skills and can't get them.

    Stop bring the government into this. Everybody knows they're useless and do nothing but make things go backwards.

    What's needed is more capital. To create large companies that can actually do something about the high prices.
    It doesn't take a lot of capital to create an app.
    What does take capital is sewing up the market (employing a big bunch of builders) and then running them at a loss for a while until you drive the competition out of the market.
    This is what your favourite UBER is trying to do. We'll see what happens to taxi prices when the competition is gone.

    There are small steps happening. Like pre-fab and offsite manufacturing.

    Here's another example of an innovating company reducing the cost of bricklaying:

    https://www.youtube.com/watch?v=5bW1vuCgEaA
    Pre-fab is a good idea to cut costs - if people accept pre-fab houses (which, so far, they have been reluctant to do so).
    I've seen that machine video before - interesting to see how that goes (differant style of building to ours).
    These sort of inovations have more opportunity of succeding than (and are quite differant to) trying to tie up a work force to push prices down.

    Back in 2009 my builder was very cheap - just trying to make ends meet with not a lot of work on.
    When things got better he charged more.
    Can't tell me that isn't supply and demand.

  4. #74
    Join Date
    Feb 2015
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    377

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    I have built few in the past - given the climate I will not build any time soon - the industry is fraught with compliance issues , red tape, cost overruns.

  5. #75
    Join Date
    Jan 2010
    Location
    Hibiscus Coast
    Posts
    1,800

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    Once our investment property goes unconditional and then settles we are building another property.
    Difference is that hubby can project manage the other trades including the builder, and then also do some of the building work himself to save costs.
    Things like skirting, scotia, architraves, hanging doors to name a few.
    Which he can do extremely competently, even though he was a high school drop out who took on a carpentry apprenticeship at age 16.
    And yes the industry is fraught with compliance issues and red tape, which is why from the outset you make sure the land is easy to build on and the style of house is a basic design.

  6. #76
    Join Date
    Apr 2009
    Posts
    978

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    Quote Originally Posted by Ogg View Post
    So what do you think I should do? Start up a company for my new build and advertise on trademe for builders? Then close down the company after the build? lol.

    $42 per hour seems too cheap. I'm willing to go as high as $50 plus GST but can't find anybody.
    Are you building for your own home, or for selling/renting?

  7. #77
    Join Date
    Oct 2014
    Posts
    47

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    Quote Originally Posted by Wayne View Post
    There hasn't been low wage inflation for 30 years - 10 maybe.
    The point is, to offset low wage inflation consumers need the price of products and services to decrease. What we have in this situation is the opposite, as the cost of services (builders) are going up. It's not going up because of increased demand or a shortage of supply. It's going up because asset prices (ie land and houses) are increasing as the result of the value of money going down, and to create those assets you need those services.

    In other words, taxi drivers know you need to get to the city, because they know people make loads of money in the city, so they charge people loads of money to get to the city.

    Likewise, a real estate agent knows you will have lots of money when you sell a house, so they charge lots.

    A taxi driver would rather sit in his empty taxi, then take a passenger for a lower fare. Likewise a real estate would rather have no listings then reduce their rate.

    This is why you need more than ECO101 to understand what's actually happening. You need to master psychology, game theory, and computer engineering to solve the problem.

    Quote Originally Posted by Wayne View Post
    It's anti-competative because you want one outfit to control the price of an entire group of workers.
    Once they can do that then they can ramp the price up also.
    I don't need to stop it for builders because it will NEVER get started. Mate, you're dreaming.

    Builders are in a totally competative environment now - they charge what they can get (same as landlords) - so they are worth what they are worth.
    You want a builder you pay the going rate. Become one yourself rather than bitching about it or maybe you don't have the skills and can't get them.
    Just lol if you think it's competitive now. You're dreaming mate.

    Quote Originally Posted by Wayne View Post
    It doesn't take a lot of capital to create an app.
    What does take capital is sewing up the market (employing a big bunch of builders) and then running them at a loss for a while until you drive the competition out of the market.
    This is what your favourite UBER is trying to do. We'll see what happens to taxi prices when the competition is gone.
    It takes a huge amount of capital. A billion is nothing these days. Microsoft is worth a trillion!

    Uber has competition.

    Quote Originally Posted by Wayne View Post
    Pre-fab is a good idea to cut costs - if people accept pre-fab houses (which, so far, they have been reluctant to do so).
    I've seen that machine video before - interesting to see how that goes (differant style of building to ours).
    These sort of inovations have more opportunity of succeding than (and are quite differant to) trying to tie up a work force to push prices down.

    Back in 2009 my builder was very cheap - just trying to make ends meet with not a lot of work on.
    When things got better he charged more.
    Can't tell me that isn't supply and demand.
    See explanation above.

    Your builder was on a normal wage in 2009. Then asset prices went up, so he charged more.

    Thing of it this way. When a pharmaceutical company develops a new revolutionary drug, what's the price normally? Sky high right. Why? Because they can charge that amount and get away with it. They'd rather see people die then sell it at a lower price point. There's no supply issue. Competitors might make copies or clones of the same drug, isolating the same components, but their price will only be slightly lower, if at all. The price is artificially high throughout the market. Overtime the price will drop as patents expire but then the whole cycle starts over again.

    What they're doing is pricing their value and that's basically what builders are doing too. They're saying "I'll make you money by building this house, because you'll be able to sell it for a huge profit". If you say no, and go with another builder, the first builder will just do nothing and watch. This is why it doesn't matter how many builders there are. Adding more does nothing. In other words, builders would rather see people homeless than lower their price point.

    In order to break this value trap you need something that changes how the market operates. Regulation is one way, technology is another, consumer behavior is another too. Uber is great because it does all three. You can see countless other examples over the last 2 decades.

    So to answer your question, "why don't I become a builder"? It's the same reason why I wouldn't become a real estate agent just to sell my house. I could easily do it but it's not worth it in the long term. Changing occupation has a cost and a long term investment is needed. My current occupation has benefits that offset the higher cost of changing frequently. That's why I don't do it.

    There's no shortage of builders. It's a myth.

  8. #78
    Join Date
    Oct 2014
    Posts
    47

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    Quote Originally Posted by DaveW View Post
    Are you building for your own home, or for selling/renting?
    Mostly economic reasons.

    Building a minor dwelling so might rent and live in it if I can't sell it.

    There's limited investment options in NZ apart from property.

    Don't want to hold money so need to spend it somewhere.

    Bought an empty section recently. 700m2. It's in the single house zone, up market suburb.

    Probably looking at $1m build cost. Hope to come under that.

    Need to save money anywhere I can, just to come in at budget these days.

  9. #79
    Join Date
    Oct 2014
    Posts
    47

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    Quote Originally Posted by Meehole View Post
    Once our investment property goes unconditional and then settles we are building another property.
    Difference is that hubby can project manage the other trades including the builder, and then also do some of the building work himself to save costs.
    Things like skirting, scotia, architraves, hanging doors to name a few.
    Which he can do extremely competently, even though he was a high school drop out who took on a carpentry apprenticeship at age 16.
    And yes the industry is fraught with compliance issues and red tape, which is why from the outset you make sure the land is easy to build on and the style of house is a basic design.
    Every builder theses days becomes a builder to do their own thing.

    No builder enters the industry planing on living off a wage.

    They enter it to become part time developers.

    They get their mates as sub contractors and create a little 'cartel of bees'.

    Then they moan about working for $50 per hour for someone else.

    Builders love compliance and red tape because it makes it harder for everyone else. They also use it for an excuse to charge more.

    Good on you though. I'm sure you've done well with your investment property.

  10. #80
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    Oct 2014
    Posts
    47

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    Quote Originally Posted by Bluecoat View Post
    I have built few in the past - given the climate I will not build any time soon - the industry is fraught with compliance issues , red tape, cost overruns.
    Was thinking about waiting too. Might get all of my consents done then wait.

    Don't think much will change though.

    Maybe contractors will be less busy but they'll charge the same rate.


 

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