Any way to avoid absurd NZ building costs in the current market?

[Bob Kane]

The big difference is compliance and infrastructure costs, as well as tax differences. GST on Aussie building is only 8%.

Those costs are controlled by the government.
When you ask why houses are so expensive in NZ, all the government ministers say it's because of greedy landlords.
I think the government is being deceitful or stupid.

[OnTheMove]

I don;t buy into it being infrastructure or tax. I could be wrong. But if an unqualified person at anything gets $50ph, how much does the builder get? How much does the tiler get? Do they use project managers in NZ is that a UK and old aussie thing?

The cost of building in NZ has gone up exponentially with the cost of property. And if an apprentice gets $50 flappn an hour, flap me Im in the wrong game. NZ labour is DEFINITELY more expensive if thats the case.

Id like a break down of $3000sqm and see what the big $ maker is being paid vs 17 or even 10 years ago, and does that stack up with rises (or lack of) in NZ median income, which is the crux of why houses in NZ are unavoidable and we were named 2nd most likely to face a correction. It seems we are paying extreme amounts and the end result all over the country is leaky homes. People dont want monolithic homes, I believe builders do as they are not double bricked firstly, instead use methods which have ended up with leaky homes all over the country. Paying more (in comparison to what the rest of us have gotten in remuneration rises in last 20 years) for sub standard quality it seems.

WHch after todays news with the banks and talk about banks have $113b bail out as per the GFC, the mere talk of it is a sniff in that direction. Im not sure the interest rate rises that willl be passed on are quite in the figure required to burst the guarded Double Bubble (Key 2008 and 150%:GDP)

[jimO]

I also did labouring with my uncle who was a builder back in my Uni years.

go build your own house then chum obviously you are a exbert

[Don't believe the Hype]

You're right on the productivity piece. Builders (tradies in general) here in NZ are inching up their prices due to the amount of work around. In Aus they add $10/hr to the bill in NZ they charge for travel time etc as you point out.

On the small jobs this add on times has an impact but on larger jobs it's only a marginal increase and given the supply/demand dynamic I expected hourly rates to rise faster than they have in NZ

[jimO]

And if an apprentice gets $50 flappn an hour, flap me Im in the wrong game. NZ labour is DEFINITELY more expensive if thats the case.

my son is a fully qualified carpenter working for a firm that specalises in high end renovations he is paid $25 a hr

[Bob Kane]

I don;t buy into it being infrastructure or tax.

I don't know why you are asking questions when you are obviously an expert on all things to do with housing.

[donna]

Those costs are controlled by the government.
When you ask why houses are so expensive in NZ, all the government ministers say it's because of greedy landlords.
I think the government is being deceitful or stupid.

Just read an older article on Stuff (Dec 1 and the reasons given were serviceability (to get to locations - i.e. we're more spread out), more fingers in the pie taking a slice (i.e. more building merchants per capita), monopoly of supply e.g. Fletcher with over 90% of plasterboard supply, lack of standardisation of build e.g. windows same size to allow for bulk supply discounts, whereas NZ prefers custom builds so higher costs per sqm.

So we need more population, less building merchants, more suppliers, way less bespoke builds to allow for bulk buying.

cheers,

Donna

[elguapo]

Just read an older article on Stuff (Dec 1 and the reasons given were serviceability (to get to locations - i.e. we're more spread out), more fingers in the pie taking a slice (i.e. more building merchants per capita), monopoly of supply e.g. Fletcher with over 90% of plasterboard supply, lack of standardisation of build e.g. windows same size to allow for bulk supply discounts, whereas NZ prefers custom builds so higher costs per sqm.

So we need more population, less building merchants, more suppliers, way less bespoke builds to allow for bulk buying.

I was in Australia last week and talking with one of the largest house builders, they are buying their window joinery from a NZ company, manufactured in NZ. Their build rates are less than $3k/sqm, but not by much and it's for cookie-cutter housing.

[elguapo]

I don;t buy into it being infrastructure or tax. I could be wrong. But if an unqualified person at anything gets $50ph, how much does the builder get? How much does the tiler get? Do they use project managers in NZ is that a UK and old aussie thing?

I'll project manage it for you, given your lack of project management skills. A house is a lot smaller than my usual gig, but if your happy to pay my rate at $280/hr I'll help you out.

[OnTheMove]

cookie cutter costing near 3k sqm in aus, there is something very wrong going on there. when you can buy near new houses in good suburbs in bris for $400-500k, I simply dont believe it. Ive lived there too long and know too many builders.

my opinion is Auck went crazy with housing so buiders cashed in while the going is/was good, if an apprentice is getting $50 an hour or $100k pa, thats all one can assume. The problem is when things dry up. But the smart ones will have made it and invested and non reliant on it as income anymore.

[OnTheMove]

my son is a fully qualified carpenter working for a firm that specalises in high end renovations he is paid $25 a hr

that sounds realistic, although a little unfair imo.

You're right on the productivity piece. Builders (tradies in general) here in NZ are inching up their prices due to the amount of work around.

Thats bang on imo. Simply so much work around. Also people got use to paying absurd prices for established property so why not get in on the act.

Anyway, it seems from the comments there is no way to avoid heavy building costs and one isnt allowed to manage the build themselves, outside doing a complete home build, which is only something id consider for an end game property on lifestyle property, which many people with some experience seem to have done in the SI.

[OnTheMove]

So we need more population, less building merchants, more suppliers, way less bespoke builds to allow for bulk buying.

cheers,

Donna

I respect your opinions Donna, but if you look say at Whangaparao, in all new builds its cookie cutter houses to the max and in the latest parts of Stanmore bay as you head over to Arkles, its cookie cutter townhouse developments. All made with monolithic builds, which with my experience in Gulf Harbour, they just start crumbling away after a couple of decades. There was an article on houses being made to last short life spans I read, I dont have a link, and Im pretty sure the avg builder wouldnt do such, especially master builders. But one does have to look at the amount of leaky monolithic houses and ask why are they using these materials over and over which are known to have problems. Im not an expert on all the types and John the Builder did explain new methods are now being used by a lot of builders. But in the case of Albany upward houses are very much the same and not bespoke.

I think building costs match the property market demand, its cashing in while the going is good.

Im glad my uncle who is a builder had his wayward son do his apprentiship, the time of IT making money is well and truely gone and now building is up there with the higher 6-7 figure earners (depending on how many crews one has going)

[elguapo]

cookie cutter costing near 3k sqm in aus, there is something very wrong going on there. when you can buy near new houses in good suburbs in bris for $400-500k, I simply dont believe it. Ive lived there too long and know too many builders.

my opinion is Auck went crazy with housing so buiders cashed in while the going is/was good, if an apprentice is getting $50 an hour or $100k pa, thats all one can assume. The problem is when things dry up. But the smart ones will have made it and invested and non reliant on it as income anymore.

Why are these builders you know not working in NZ? Given you do not believe any of the information I've posted, they clearly would be making a fortune. Perhaps you should be running a business building houses, after all you can make the margin between the $850/sqm you believe and the $3000/sqm you do not believe.

[jimO]

that sounds realistic, although a little unfair imo.





.

thats the going rate a mate of mine is a carpenter on the dental school rebuild he is on 28 a hr tradesman pay is crap

[Frezzinghot]

I don;t buy into it being infrastructure or tax. I could be wrong. But if an unqualified person at anything gets $50ph, how much does the builder get? How much does the tiler get? Do they use project managers in NZ is that a UK and old aussie thing?

The cost of building in NZ has gone up exponentially with the cost of property. And if an apprentice gets $50 flappn an hour, flap me Im in the wrong game. NZ labour is DEFINITELY more expensive if thats the case.

Id like a break down of $3000sqm and see what the big $ maker is being paid vs 17 or even 10 years ago, and does that stack up with rises (or lack of) in NZ median income, which is the crux of why houses in NZ are unavoidable and we were named 2nd most likely to face a correction. It seems we are paying extreme amounts and the end result all over the country is leaky homes. People dont want monolithic homes, I believe builders do as they are not double bricked firstly, instead use methods which have ended up with leaky homes all over the country. Paying more (in comparison to what the rest of us have gotten in remuneration rises in last 20 years) for sub standard quality it seems.

WHch after todays news with the banks and talk about banks have $113b bail out as per the GFC, the mere talk of it is a sniff in that direction. Im not sure the interest rate rises that willl be passed on are quite in the figure required to burst the guarded Double Bubble (Key 2008 and 150%:GDP)

There is no doubt a correction is coming, like Ireland we are overpriced, there is no housing shortage, just look around housing is going up everywhere. I am sitting tight for now as i want my next purchase to be low enough to have some cashflow.