All Topics / Overseas Deals / Building in NZ

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  • Profile photo of SeafireSeafire
    Join Date: 2005
    Post Count: 9

    Just seeking some experienced information on this subject. I am interested in building in NZ.
    I have been making the comparison of Established home purchase versus buying a section and building.
    In Australia in general terms which of course is determined by lots of other factors, but in general it is cheaper to buy land and build a house. My initial research in NZ seems to be the opposite and it is dearer to buy land and build rather than established.(land being cheap but building dear)
    I am hoping someone with the experience of building over there can convince me otherwise and guide me to a builder who can build where by I can achieve positive cash flow buying sections and building. I have seen some fabulous land I would like to purchase in NZ. I am seeking to find a solution to my problem so I can positive cash flow from this type of investment.
    Has anyone got a builder or expereince in this type of section/build scenario in NZ.
    Would appreciate some shared knowledge.
    Thank You

    Profile photo of QueenstownerQueenstowner
    Join Date: 2004
    Post Count: 27

    Hi Seafire
    I moved over here from oz to buy land and build houses.I’m currently building in central otago and i would say that you would be very unlikely to be able to build here and get your house CF+
    land here is 3 times what it was when we started buying 3 yrs back.The lands not the problem, it’s the cost of materials and subbies.Cost of building down here is running at 1k to 1.3k/m2 for an average home.
    On the other hand if you a builder or are a great diyer you could do it all yourself except needing a plumber and sparky.This is basically what we do as well as sourcing products at the best prices.
    Things in your favour for building in nz are anybody can build a house with no limits to how many you build.
    very cheap and easy to subdivide land.
    no stamp duty so cheap to change your entity.
    and if your going to keep it for a while, no CG tax.
    regards Queenstowner

    Profile photo of SeafireSeafire
    Join Date: 2005
    Post Count: 9

    Thanks Queenstowner I have sent you a pm.
    Its a challenge and its the rock in the road I am hoping to find a way around it.

    Profile photo of MiniMogulMiniMogul
    Join Date: 2002
    Post Count: 1,414

    Hi Seafire

    I just started with a huge search engine list and picked my way through it. You need to do the same and not just take the first quote as the best you can do (or email me and ask me who I am using).

    As I told you and as others have in the development section project builders are a good option and cheaper than made to measure builders.
    If you don’t know what a project builder is then you have to go off and find out otherwise I fear for you, I really do. Part of your education is being able to speak the same language as your project manager, and know a soffit from a batten, a project builder from another, the going rate for cost per square meter for five different construction types, the different cladding options, and so much more. I am not the best person to ask as I haven’t done my first development yet, but gee, I’m making it my BUSINESS to educate myself on the subject. Nobody can do this for you. And if it’s all a bit much, then just pay someone to organise it for you, it’s called hiring a project manager.
    You mentioned using Australian plans but why, are you making art, or being cost-effective?
    Local people for local knowledge. Another reason why my team are irrelevant to you unless you happen to be developing in exactly the same town, and if you are, you won’t be able to use my team cause they are already booked! hehe

    But first you need to figure out that the area you want to build in has a shortage of houses and capital gains through the roof. Do you have good local market knowledge on where you are developing? Because otherwise just please don’t do it, certainly not because you’ve seen some cheap land on the internet. I get the feeling from chatting to you on emails that you are not that far down the track with your research, and you really really need to be. before you do anything. Touch base with valuers, rental managers, real estate agents.

    Also I need for an area I am developing in to not only have cap gains going through the roof but also that rental demand is through the roof with a waiting list. THAT is where you want to develop and where you have the best chance.
    Basically you are developing to solve that town’s housing shortage, or expected future housing shortgage (such as some big project commencing in the future that you will be ready for, catering for the expected demand.)

    if the town doesn’t HAVE a housing shortage, it’s risky to develop there!

    You need to also consult with a rental manager as to what is the most popular amount of bedrooms to build, things like that. Also whether your style of building fits in to the surrounding areas.
    You don’t want to contrast too much i.e. too ‘poor’ in comparison or ‘too rich’.

    Units you would build in Paddington Sydney or Perth metro would be way different to units you would build in Eketahuna, NZ. This is also in relation to you mentioning you want to use Aussie plans. Why!

    What I am aiming for is that the property will be going up in value even while I am building it.
    Where you can’t buy CF+ve any more.
    If you still can buy CF+ve where you are thinking of developing then it is unlikely just by logic that you will be able to manage a CF+ve development. Just buy one instead.!

    You want an area where it’s so hot that the tenants are waiting before it’s even finished. Where the real estate agent is ringing you before you’ve even hammered the first nail telling you they have some interest. Where the valuer is telling you what he thinks they will be worth before you even have plans.

    It’s finding a viable area first. If you are doing a development in the wrong area then no matter how cheap your development, it may not give you the result you want.

    the weird but good search engine I found was called Piper Pat. Type in BUILDING and then click GO (don’t just press return as on other sites, otherwise it doesn’t work) you will find loads of links.

    Then come back here and share your insights as others have done with you, good luck.

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