With our borders closed, we’ve all been travelling around Aotearoa a lot more lately. With the possible exception of the last challenging nine weeks, we’ve totally embraced holiday roadies, discovering new sights and visiting family and friends. Domestic tourism has never been this busy. The same goes for the building industry. Signalled by large collections of utes and vans, the massive number of new builds on the edge of small and big towns is easy to spot. Home buyers save by choosing to build new.
It’s never been a better time to build new
Homing our biggest number of citizens, it seems only right that Auckland is seeing the lion’s share of the building boom. Supply chain challenges aside, it’s never been a better time to build new, compared with buying existing. It’s not that surprising and somewhat of a relief, the latest data from Valocity* has found that the building boom is making a big difference to the number of homes available.
*Valocity is a NZ company that uses the latest technology and data to offer lender solutions.
What’s pretty significant about this latest report is that the building boom is making a huge difference to price points. Encouragingly, it found new homes were cheaper than existing homes in Auckland, Wellington, Tauranga plus Queenstown Lakes. And in some cases, by quite a significant amount.
Surge in new builds gives buyers more affordable options
Home buyers in three of the country’s biggest and most expensive cities can save hundreds of thousands of dollars by choosing to buy new. The surge in new builds gives buyers more affordable options, particularly where they are needed most.
Cracking into the numbers, Wellington offers first-home buyers the biggest savings. The typical price of a new home in the capital sits at $972,000. $248,000 lower than the cost of an existing home. In Auckland, new homes are $119,000 cheaper than existing homes, although the median value for all new builds in the city is still high, at just over one million dollars.
Building density rules relaxed
So urgent is the need for new housing, in a rare show of bi-partisanship, the two major political parties have joined forces to boost supply. In an agreement announced on October 19th 2021, changes to the Resource Management Act will make it easier to build new homes. More relaxed rules on building density in our major urban centres will be introduced to allow for faster growth. Of course, even bi-partisanship allows for political debate, so watch this space Auckland, Tauranga, Hamilton, Wellington and Christchurch.
Smaller building platforms make a big impact
Many would-be homeowners will welcome the trend for higher density housing. At a lower price point, the most favourable entry points to the housing market are new build apartments and terrace houses. With smaller building platforms, smaller homes represent a new way of living, especially with so much pressure on available land. A reduced physical and environmental footprint gives small homes a big impact. Somewhat ironically, the study shows the biggest savings are to be had in Queenstown-Lakes. Here the new build apartment and terraces have a median value of $636,000. That’s a whopping $609,000 less than the median value for existing homes!
Trends mean move to more sustainable living
Having the very latest in insulation across the walls, ceilings and under floors makes heating new homes more energy efficient. Double glazing in new homes does the same. Older, existing homes particularly are orientated very differently to new homes which utilise the sun for maximum passive heating. Opting for homes with smaller square footage means less raw material used in the build process and less energy overall. Again, helping us move towards more sustainable living.
There’s more good news in the latest research which says, new builds are good investments. While there are regional fluctuations, nationwide, the median value of new-build homes rose on average close to 20% in the 12 months to October 2021 to $945,000. Now is definitely the time to let your new build begin.
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