David Whitburn

The last couple of weeks have been a real adrenalin rush. Fuzo’s finders have bought and sold a couple of fantastic minor dwellingable (new word we created) properties, we are doing many due diligence reviews on propertiesfor Fuzo clients to subdivide, and of course lots of great work for the Auckland Property Investors Association (“APIA”). I am a passionate member and on the Board of APIA, currently holding the position of Secretary.   APIA provides a massive lobbying force, group to network with, access to local area and special property interest groups, the NZ Property Investor Magazine, discounts and of course monthly meetings with great topics and speakers. I think every property investor in Auckland would receive fantastic benefits from joining APIA. I have been working with Garth Melville (our Treasurer) on APIA’s submission of the Reform of the Associated Persons Rules (ie the tainting rules). Combining President Andrew King’s input with property investor statistics we compiled a fantastic submission. Other bloggers here have talked about this issue, so I will not thrash it – instead I will update you with what changes are made if any as soon as I know about it.

Initial reactions to new housing rules

We are seeing a number of Interesting things lately – eg. proposals to have double glazing of windows of all homes, stricter rules on insulation and a myriad of smaller things all designed to maximise heat prevention (which is great) but sadly this will raise the cost of new houses. And when people and the media complain of higher house prices, this will just take house prices that much further. In certain areas of New Zealand (eg parts of Southland) to build the cheapest possible permitted home you will have the situation of the house costing well over $1,000 per square metre to build, when the neighbouring older houses could be worth $500 per square metre. Building new houses will be that much tougher for many home owners, and indeed investors alike.

My advice – call an architect or development specialist before embarking on ANY structural building project, then get estimates of costs from them and reliable builders to know what your project costs is going to be. Too many people are thinking that their building will be just like the last one they did 4 years ago.

Newsflash: the rules have changed. The Building Act 2004 has come in, the Building Code is far far stricter and more expensive to comply with. Materials and labour costs have risen too, council fees are Massively up in some cases quadruple what they were 4 years ago! In addition some council now have new revenue streams (eg. development contributions) that they justify under the Local Government Act. So acknowledging that it is development and some variations are going to occur – make sure that you have a pretty firm idea on the numbers, to ensure that you can finance the project, then don’t delay, just do it.

As to what strategies I believe that you need to adopt for success today – this will come in tomorrow’s blog.

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