1493006555837 - Homes.co.nz: Buying a new home dearer than building one

Homes.co.nz: Buying a new home dearer than building one

Building a new house in a major centre could net you on average around $150,000 in capital gain, new research suggests.

Property research firm homes.co.nz has looked at the gap between the cost of a new section and the median price of a new house.

It found that in Auckland, Wellington and Queenstown – areas where the property market is at its hottest – new homes typically sold for around $600,000 more than an empty section.

In Auckland, for example, new homes were selling for $1,188,740.

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The median section price was $535,153, and Statistics New Zealand estimated new builds in Auckland cost around $400,000, making building about $253,587 cheaper.

Wellington new homes are selling for $597,000 more than an empty section and in Queenstown, they were $602,000 more expensive. 

Homes.co.nz spokesman Jeremy O’Hanlon said that even though building could be stressful, the evidence suggested it was worth the effort financially.

“For me it’s highlighting that building can be a savvy way to get into the market.

“It does take a bit of energy to do but it gives people comfort that if they’re reasonable about their approach, there’s some significant gaps between the end result value and the costs.”

There were plenty of good building companies that offered house and land packages and it was easier to get a mortgage. 

“Banks are backing fixed priced builds, so as long as you go with a reputable company … It’s not so hard to get into a new build these days.”

However, construction could be stressful, and some people put it in the “too hard” basket.

“Building new adds a range of variables to your life including delays, unforeseen earthworks and the people involved in the build,” Hanlon said. 

“I’d recommend carefully analysing your options, regardless of the possible gains to be made.”

Although a shortage of vacant sites is sometimes cited for low building rates, Homes.co.nz also found that even in Auckland and Wellington there were thousands of vacant level sites.

Auckland had 5154 available sections of more than 400 square metres, while Queenstown had 1721, Wellington 977, Hamilton 761, Dunedin 1129, Tauranga 1348 and Christchurch 4966.

O’Hanlon said these figures were likely to be greater as subdivisions were sometimes counted as one site by councils until the titles were issued.

Building costs (GJ Gardener)

* National: $350,508 

 * Auckland region $381,336

* Queenstown/Lakes $335,005

* Wellington region $367,893

Gap between median new home price and vacant section price/costs per square metre for a 140sqm, three-bedroom house (Homes.co.nz)

Auckland: $653,588 / $2957per sqm 

Queenstown: $616,830 / $3054

Wellington: $607,923 / $3047

Hamilton: $471,725 / $2246

Dunedin $468,245 / $2439

Tauranga $460,829 / $2518

Christchurch: $391,425 / $2082

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