Builders - what will happen to construction costs (Covid)?

[jack2016]

Does anyone in the know have any idea what will happen to building costs?

I think in AKL it's $2k/sqm and in Central Otago it's $3k/sqm PRE COVID.
As you can see, Central Otago builders have been making a killing.

But in a recession (predicted), will the cost of building go down or up?

[jimO]

Does anyone in the know have any idea what will happen to building costs?

I think in AKL it's $2k/sqm and in Central Otago it's $3k/sqm PRE COVID.
As you can see, Central Otago builders have been making a killing.

But in a recession (predicted), will the cost of building go down or up?

have you seen queenstown i would say the extra grand a m2 would be gobbled up by foundation and higher end finishes, xtra time faffing about getting materials will add to costs

[jack2016]

the 3k/sqm was for a dead flat section with no digging and no foundation!

[Anthonyacat]

Have you seen an Otago builders finances? I havent, but suspect they're making similar money as if in Auckland.

Their own costs will be higher to justify the higher charges. Whether that's cost of raw materials, higher consent and other legal costs (though how it could get higher than Auckland I dont know...) or maybe there's less work per builder so they spend more time not working, need to cover overheads.

I suspect it's a higher quality finish, simply an up-spec build. You can spend $3k per sqm pretty easily in Auckland if you want.

If it were truly that one could build the same house for the same costs but charge an extra $1k per SQM, making $150-300k extra pure profit per job, that sort of secret doesnt stay secret for long, and every builder in the country goes there, then there's competition and prices drop.

[jimO]

the home building industry has been killed by the group home builders you cant compare houses by M2 rates, a low quality shitbox for 2ooo a m isnt the same as a high end house the same size with a $50000 kitchen and 3 bathrooms, also there was never a house built that needed no digging

[Frezzinghot]

6 year ago we built our first home for $1800 per sqm. It wasn't high end but not low end either, 3k now seems expensive and I would expect a higher level of home for that price. We then sold this last year and brought a show home within the same area, when the building company builds these the spec is always higher than normal so if they are available and a good price an ex show home is the way to go.

[sparxNZ]

But in a recession (predicted), will the cost of building go down or up?

It went down post GFC.
I had a property under subdivision at the time and builders were cutting their own throats to stay afloat, so labour rates fell a lot. I got a 140sqm house built on the new section by GJ Gardner for $170k in 2009/2010. A lot has changed since then and red tape makes up a greater percentage of a build, both at a local government level and within the supply chain, but construction labour rates have also shot up from the $50s to the $70s. I'd expect downward pressure on labour rates over the next two years at least but hard to say just how much cheaper it will make a build. Maybe $300/sqm cheaper?

[Frezzinghot]

the home building industry has been killed by the group home builders you cant compare houses by M2 rates, a low quality shitbox for 2ooo a m isnt the same as a high end house the same size with a $50000 kitchen and 3 bathrooms, also there was never a house built that needed no digging

The fact still remains, if you live in Auckland expect to pay 9 times your average income to buy a property in Auckland. Regardless of what building company you use. Its over valued. Just by playing the game you win.

[Meehole]

Does anyone in the know have any idea what will happen to building costs?

I think in AKL it's $2k/sqm and in Central Otago it's $3k/sqm PRE COVID.
As you can see, Central Otago builders have been making a killing.

But in a recession (predicted), will the cost of building go down or up?

Son has just started building last week, $2600 m2 in Riverhead, Auckland. High end finish with granite benchtops, frameless glass showers, electrics up the wazoo etc. 250m2 on flat site with raft floor. Had been priced and locked in prior to Lock down.
I'm just pricing up a new build for us and looking like $1700m2 with high end finish. Project managing it ourselves and to give us break we are doing some work ourselves, insulation, kitchen installation, small earthworks.
Why you all whinge at builders rates, they are nothing compared to what the electrician and plumber sting you.

[Siberian]

Son has just started building last week, $2600 m2 in Riverhead, Auckland. High end finish with granite benchtops, frameless glass showers, electrics up the wazoo etc. 250m2 on flat site with raft floor. Had been priced and locked in prior to Lock down.
I'm just pricing up a new build for us and looking like $1700m2 with high end finish. Project managing it ourselves and to give us break we are doing some work ourselves, insulation, kitchen installation, small earthworks.
Why you all whinge at builders rates, they are nothing compared to what the electrician and plumber sting you.

@Meehole, thats a quite difference! is that purely pre/post covid pricing? Ie are you building in AKL also?

[Meehole]

@Meehole, thats a quite difference! is that purely pre/post covid pricing? Ie are you building in AKL also?

His pricing pre-covid. He was going to PM himself so would be cheaper but lender wanted a building company to look after construction loan borrowing. He is using some of his own contractors and suppliers but the building company charging a margin on top of the prices he secured.
Ours is in Mangawhai but most of the suppliers are from between Akld and Mangawhai and the trades are ones we know from our jobs or have been recommended by the builder.