Construction costs for stand alone houses and apartments fell slightly in the second quarter, build costs for retirement village units still surging

Build costs, both material and labour, need to fall not flatten. You can’t have a 50% increase in 3 years and expect everything to keep ticking along.

I spoke to a few lenders yesterday and until things stack up their books are closed. There are going to be a lot of people with not a lot to do in 2024 unless something changes.

I am still picking some form of GFC 2.0.

Funny looking building, does anyone know what the series of triangles against the wall are doing, part of the roof structure? I count 9 or 10 

When do the insulation and glazing standards begin. Increased build costs are not entirely comparative because of changes to regs

The numbers are a crock. Total joke. It’s actually corrupt. One of the worst kept secrets.

Basically, lower than credible costs are quoted in the building consents. There’s a couple of reasons this is done, including incurring lower council fees.

Add at least 25-30% to these ‘official figures’

The cost to build a residential home is now part of the very broken real estate problem. Vendors and agents use the cost of building to keep list prices high “You try to build this house now”. Mean time those who have built recently have had their registered valuations come in at way less than the build cost ( a friend of mine lost $350,000 on a fairly modest home - cost to build vs registered valuation). It’s a stalemate.

In years gone by building was a real option that ran along side the option of buying an existing house. This has now gone and in our area the list of sections for sale keeps growing ( that’s not from new subdivisions, it’s just those holding them now trying to cash up).

Much of the blame of the now outrageous building cost rests with the building industry. For two years we have not been able to get quotes even for smaller jobs, just have had to accept time and cost. Crazy reasons have been offered for price rises - last time I had a house costed - just over 12 months ago, the basins and baths were being airfreighted in as shipping was so jammed up and expensive post COVID. I now understand that shipping costs are back to prepandemic, but no correction in any of these prices.

As with the broken real estate market, greed has reigned supreme in the building industry and we, New Zealanders, have now opted out of both.

I'm still getting quoted $500/day for an apprentice. 

Why can't councils insure against liability, thus making them more willing to bring in proven offshore building products?

In other words, f**k fletchers

Just started 40 odd KO townhouses in 2 sites in Rotorua, $3500/m2 + GST.

Last time I did that many townhouses m2 they were on the coast in Mt Maunganui $3100/m2 + GST in early 2019. 

So 13% increase for lower KO spec interiors and higher spec windows and insulation over 4.5 years = 2.89% p.a.

Not really apples for apples comparison. I could up the interior spec on the KO townhouses for less than $500/m2 to match the older build and the m2 rate would have gone up 29% over 4.5 years ($3100/m2 to $4000/m2) = 6.44% p.a. increase. 

Our materials peaked in May 2022 and my timber/sheet rate is down 25% since then. Labour peaked around then too and has retreated $5-7.50/hr (10% ish) over the last 6 months. My labour and material costs are only 20-30% of a townhouse contract value however. 

Builders who value their clients and long term relationships/repeat work are still providing value (commercial world). Builders who are in it for short term gain and want to rape and pillage their (1 off) clients will fast run out of work (group home builders). 

Industry has little forwards work.  Belts are being tightened.  "Toys" are being sold.

Facebook some months ago builders 'won't get out of bed for anything less than $100 per hour'.

So much price fixing going on too.

Clearly no business heads on some.  Price themselves out of the market grinding construction to a halt.