Building cost inflation reference - Chch.

freeranger, Mar 25, 7:47pm
http://www.stats.govt.nz/browse_for_stats/economic_indicators/CPI_inflation/ConsumersPriceIndex_HOTPDec14qtr/Tables.aspx
go to link then to right hand side of down loads and bottom choice your looking for supplementary table 4.01


gman35, Mar 25, 8:48pm
Either way there are certainly 2 economies in ChCh nowadays the way I see it.
1) Building trades / Hospitality (food and drink be it bars or cafes , the amount of tradie's or associated supplies rep's vehicles you see parked outside them is amazing / new vehicle sales (utes).
2) Everything else.

gman35, Mar 25, 9:28pm
Oh , I forgot local cigarette sales.
Canterbury must be way above the rest of NZ , as going by the ones outside the local bakery it seems like every second painter/plasterer smokes !

oskybosky, Mar 25, 9:55pm
Give it 2 or 3 more years, then costs are going to come down, that's when I'm going to look at repairing my house with our cash settlement.

gman35, Mar 25, 10:18pm
That would certainly be the idea.
I have always wondered what the rush was to do the "cosmetic" repairs anyway , as so many plastering jobs have probably re-cracked just due to settling of houses anyway. (And yes I do realise that many have done so because of cr*p jobs in first place).

mm12345, Mar 26, 7:05am
Good stuff - about a year later than I'd have liked :) but no problems.
I couldn't find that data a year ago.
Building cost inflation has been running at about an 8.5% average annual rate in Chch since 1st 1/4 2012.
I spoke with my lawyer before cash settling, in order to hit my insurer for an indexed cost escalation sum based on delay/negotiation from initial offers. Lawyers advice was to throw it back on the insurer - as they know. Their revised offer was based on about 9% over the 6 month time, so was about right.
For posters indicating above that "tradies are milking the system", that hasn't been my experience. I'm sure it's happening sometimes, but professional fees and supply of some materials were things that would have blown the original budget for me. I really couldn't give enough praise for the quality of work and value I received from the plumbers, drainlayers, builders, cladding contractor, scaffolder, demolition workers, and material suppliers I used in our (self-managed) repairs. Designer too.

retrodesign, Mar 27, 6:12am
I have issues with these costs. They are a national average and had no bearing on two cases I have personally dealt with. We are probably the most expensive area to build excluding land cost so an average isn't good enough.

mm12345, Mar 27, 8:31am
Read the post and link at #2 - there is in fact a Chch index.
Yes - it is expensive to build, but those increased costs aren't solely because of increased building costs / demand surge.
If the claim has been agreed/costed, but there's a delay before settlement, then you need something to work on - you can't fully re-cost every week, month etc.
If people take cash settlement now, but there's no likelihood of work commencing for a year or two, then the shortfall could be considerable.

retrodesign, Mar 27, 8:00pm
Sorry. Missed that bit. However I still have an issue with the figures. I dealt with my FIL's claim and he had an old sum insured policy. The original sum when the policy started was correct and each year the CGPI percentage was added. They ended up under insured by about $600k. I kid you not. We were in contact with Statistics at the time to try to work out what had happened. Unfortunately never could find the problem. Don't know if its land cost or
materials but in our case the figures were way out. House was TC1 and normal construction. It was quite large but that doesn't alter the fact that the figures were wrong. I can only assume that figures include all houses built and the cost of buying a new house in a subdivision is less than the cost of repairing on existing land. God knows.

mm12345, Mar 27, 11:30pm
Well if you build a new cookie-cutter home in a subdivision, then in most cases the build will be to minimum standard to meet code, and minimum cost materials. Cheap aussie brick cladding, 0.44mm base coating grade roofing, cheap alu window joinery, cheap particle board kitchen, cheap electrical/plumbing fittings etc. If you want better - then you pay. Most people seem to want quantity (ie as large a footprint as they can afford), and compromise on quality.
Subbies are also screwed down very hard (which IMO explains some of the problems many people are having with completion/faults), and you can bet that the larger builders don't pay anything even remotely close to the very high prices retail customers pay for materials.
I agree with you about "like for like" full replacement. Looking out my window, builders are completing a 210m2 home for my neighbour. Cost so far is about $1.3 million (excluding land cost) - over $6,000 / m2. A big wake-up call for people when setting value on sum-insured policies on homes. Cordell calculator came up with a sum of about $930k for our place - similar size.

retrodesign, Mar 28, 9:03am
You have hit it on nail, so to speak. The new sum assured policies have a post inflation margin written into them but it is nothing close to what people would need in another significant event. I reckon 90% will be under insured.

u25, Mar 28, 9:07am
10 to 12percent

mm12345, Dec 24, 11:13am
Is there a *Christchurch* building cost inflation index being used by contractors etc?
I'm just wondering this, as I've seen reference to unofficial building cost inflation running at 5.1% PA but the indications I'm getting from old quote revalidation, is that this should probably be closer to 10% for Chch.

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