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

[Frezzinghot]

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

NZ is becoming a bunch of rip off merchants!!!

[OnTheMove]

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.

You could sell up and rent for a bit? I think a lot of people sold and moved to the SI, but Aucks prices have chased them somewhat haha. There are some gorgeous areas in the SI. I think as people we think we need $100kpa (with freehold house) to live off. I think that is absurd. The minimalist brigade which is becoming a massive movement would have you living in a caravan on a $100k plot somewhere in NZ. I think the reality is some where in the middle. Life is too short to work to 65, die on the way or not that long after. The stats on lfe after 65 if you retire to make it to 85 are not that high no matter the lifestyle. Id be wanting to retire but keep my brain busy by 55. bit like bill gates but a bit younger and a lot less $000000000s in the bank ;-)

Why is the government looking to increase this $123B Bank bail out by increasing interest rates as of March? Did they just read the bloomberg report haha. In seriousness I personally think they are preparing. And the reality is, the only way kiwis will get into kiwi homes is to take the inflated money from Key that is sitting in the property market and deflate it back to 9%pa from 2000 to now, figure the difference is approx 40%.

The old 8-10%pa in NZ served us well. This highly volatile market does nobody any favours. It makes it essentially all in on black, when will the ball hit red....

[OnTheMove]

NZ is becoming a bunch of rip off merchants!!!

haha, ever so subtle. I like the term making Gold while the Sun Shines more.

In seriousness. A house was built in Whangaparaoa inc land in 2000 for $120k. Its GV is now $600k on the house alone. You cant tell me building costs have gone up justifiably since 2000 by that margin. 140ssqm.

Of course its not like for like as its not a new build. But new builds arent far off that price. This is why I am asking the question though, how to get better build value without sacrificing quality. And with the lack of answers it seems like the answer is you cant.

Because I have a plot of land available at $400k in a very good suburb looking back over the water to Auck. 150sqm would be $450k? what else would you factor in on the pricing?

Either way it seems better value to me all up say $900k than the $950k property that sold for $160k in 2006, on a cross lease, with no water views (is a nice build though).

[OnTheMove]

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

Man thats a lot of hard work to get up to $25hr.

So who is making the money then. Is it the Builder or is the owner of a set of builders making the profits off $3000sqm? Doesnt seem like a wage Builder is on $200/hr etc. And as most homes seem to be cookie cutters, it seems to me its the owner of the building firm or possibly a developer (or they could be one in the same). making what appears to be large percentage profits. Not the individual tradie.

Thank you for the insight.

[OnTheMove]

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.

A bit like trying to attract Aussie NRL players to the Warriors, no amount of money will move them to NZ, don't ask why, they Aussies.

The thought did cross my mind in 2003 to be honest, you dont need to be a builder to be a developer And it seems its the developer/housing firm making the large chunk of that $3000sqm :-)

[donna]

Yeah it's interesting when you analyse it. I reckon the winners are: Banks, Architects, Building Merchants & Suppliers, and Developers - for time until they end up bankrupt.

cheers,

Donna

[OnTheMove]

Yeah it's interesting when you analyse it. I reckon the winners are: Banks, Architects, Building Merchants & Suppliers, and Developers - for time until they end up bankrupt.

cheers,

Donna

Yeah thats Prob spot on. I was worried about Builders once the market crashed back in about 2005, thinking there will be mass unemployment in that sector (this was in Aussie), now in NZ I feel a little less compassionate, but to be fair it does sound more like the folk you summed up.

What about companies like GJ Gardiner, any ideas on what they charge for one of their planned builds 150sqm~?

Imagine if their was another GFC, with so much personal debt to what I consider a piss weak (in terms of WHAT we produce) GDP, 40% is not really totally unrealistic. Its was all about the GDP but now its about that 150%:GDP ratio which is scary.

And the Stoic concept in NZ that property NEVER goes down, is an overly optimistic view point, but thinking it will definitely pop down 40% is rather pessimistic. I think the truth lies hopefully somewhere in the middle when it does happen and a long plateu and back to our good old pre 2000s 8-9%PA so cashflow property is king and the renovate to profit guys have more of a chance, usually adding actual value unlike 50% of Whangaparao which seems non certified AND on Cross Lease, which is a $40k+ head ache if possible.

So if I cant avoid the building costs, I actually like the look of GJ Gardiner homes and much prefer weatherboard to horrible Monolithic which was in vogue 20 years ago, not so much now imo aside from cookie cutter easy to build developments. Gulf Harbour is Cookie Cutter paradise. I could name a few where every house out of 50 odd is identical, literally. shudder.

I wish I had bought up there when I was young and house prices were $40k, which was only 20-25 years ago. But it is PITA if you want to work in Auckland city. Even with the ferries and even if they put in the new road.

This is actually more a PPR Im looking at hence why I was asking seriously if there was a way to lower building costs.

[donna]

My 10 cents worth Umm shuddering at the thought of a row of houses all the same, is one of the reasons our homes builds are expensive - we just can not help ourselves - we want to be different!

That's fine but it comes at a price. We can not get economies of scale and real buying power if we insist on being different when a good build for a good price should be more important.

However just think what will happen to the industry if we all said - just build rows and rows of Coronation Street. It would sink sectors like architecture, etc and I guess it's also why the prefab property (where it's built in the factory) and constructed on site within weeks just hasn't seen the light of day.

cheers,

Donna

[OnTheMove]

My 10 cents worth Umm shuddering at the thought of a row of houses all the same, is one of the reasons our homes builds are expensive

Donna

I couldnt 1000000% agree more with you Donna. I also do not mind some of the bigger pre plans like GJ Gardiner as they tend to use quality materials and quality builders (if managing the build etc).

If it werent for not wanting to devalue somebodies beloved property, I would post a street on the coast (you can likely guess the suburb) which is 100% identical for 50 detached town houses and 20 attached town houses/double story units. Not only this but I have not seen a single one where the render has not visibly cracked from the curb, I also know there is no protection on the interior of the spray render or any drainage. Just polystyrene insulation getting nice and soggy. Im sure some have stood up better to the backing sun and salt spray over time and no doubt some owners would have tried to rectify the issues, but it does look funny with the difference in colour of fixes :-)

Ive found a home built by an independent architect/license builder (I bet they have made some dosh last 20 years) where I really enjoy the quality of what their plans offer and like you have said, look a little different along with using quality materials.

Perhaps weatherboard (or the modern version of) is coming back in vogue given the leaky home syndrome plaguing Auckland and people wanting a home to be proud of.

[elguapo]

However just think what will happen to the industry if we all said - just build rows and rows of Coronation Street. It would sink sectors like architecture, etc and I guess it's also why the prefab property (where it's built in the factory) and constructed on site within weeks just hasn't seen the light of day.

Prefab and factory build have been around for decades. Lockwood and Keith Hay for example. The simple truth is that isn't just isn't that economic to use factory builds in Auckland with land prices as high as they are.

[donna]

I think it's also the stigma that comes with the modular or prefab build considered cheap and entry level and the fact that the home is a status symbol. We're getting what we've asked for.

cheers,

Donna

[OnTheMove]

The funny thing is Monolithic back in the day, (late 80s etc) was a status symbol. The "Miami Vice" houses. But they were built it appears a LOT differently to today as the ones I grew up around are still standing and have no issues at all. The ones I was familiar with in NSW/Qld were double brick then rendered.

So surely Donna it was the building standard of leaky monolithic homes (along with 99.99999% of homes, slight exageration) from Albany up is a monolithic cookie cutter, its for that reason I think some people are going back to other material and architecturally designed homes that are driven by the architect and PM so no corners are cut. Just perhaps?

Who knows what we will think of them in 40 years time.

You can't beat a genuine full porch and wrap around detailed hardwood exterior, hard wood floor, hard wood infrastructure renovated Qld'r home imo. Thats why Im quite partial to weather board but with some design not just a squard box obviously.

[jimO]

Tfor that reason I think some people are going back to other material and architecturally designed homes that are driven by the architect and PM so no corners are cut. Just perhaps?

.

architects designed all the leakers

[elguapo]

I think it's also the stigma that comes with the modular or prefab build considered cheap and entry level and the fact that the home is a status symbol. We're getting what we've asked for.

cheers,

Donna

Yes, large part of South Auckland are these houses from the 70s/80s. As i have said before, no one is interested in low cost housing. What they want is nice, designer houses in good areas at a price less than everyone else is paying. The 'affordable housing' idea is a lie.

[elguapo]

You can't beat a genuine full porch and wrap around detailed hardwood exterior, hard wood floor, hard wood infrastructure renovated Qld'r home imo. Thats why Im quite partial to weather board but with some design not just a squard box obviously.

There is one of these in Gulf Habour. I thinks it's about $1.4m