It’s something we’ve been doing at Assured Property for 15 years now; building smaller, building smarter. Building houses to match the needs of the tenants, without wasting any costly space.
Sounds simple, why doesn’t everyone do it, I don’t know. It might have something to do with the fact that most group builders have a large number of standard plans to choose from. When were those plans last updated? What was the designer’s brief when she was asked to draw them? Probably not to design the house to be as compact as possible, while still giving the occupiers the layout and space they need to enjoy the property. Or perhaps it has something to do with ego. My house is bigger than yours.
Whatever the reason the we Kiwis think a couple needs 170m2 to live, thats the NZ average house size in 2018 versus the United Kingdom average of 77m2, the size is starting to coming down.
If we can build compact, quickly and at scale, we might be able to keep houses coming online at the pace we need. The problem then becomes the red tape. The RMA, the councils, the building code. These are the things holding us back at the moment. Consents are taking longer, council inspections need to be booked at least 3 weeks in advance at the moment, and there are a lot of inspections throughout the build. Too many, 3-4 times more inspections then are necessary in Australia, one of the reasons NZ houses cost 30% more to build then Australian houses on average (A 2013 study by the Productivity Commission).
If we could stopping adding new regulations that make houses more expensive that would be a great start, but I can see that happening, not with the constant stream of regulations we are seeing at the moment. The amount of money we are literally pouring into the ground is incredible, thanks to ‘possible liquefaction, something we have to design and build for in Hamilton now. A $25,000 floor a year ago now costs $75,000. That increase in cost is paid for by the home buyer, or in the case of rental property, the landlord and the tenant.
If you already own a property you’re fine. If you own your own home, and perhaps a rental property or two, the rising costs are driving up the value of your property and the rent. There is no better time to buy then now, costs are rising rapidly, so houses are getting more expensive and rents will continue to rise.
Click on the link below to read the article by Infometrics’ Nick Brunsdon.
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