Dunedin home building companies optimistic

Dunedin building companies are optimistic new homes are back on the agenda for property seekers.

Most of the nine building companies contacted this week reported significantly more inquiries in the past two months and more customers serious about building, putting it down to a combination of the traditional spring surge, continued low interest rates, a steadier economic outlook and interest from former Christchurch residents.

Section sales are also on track this year to reach their highest levels since 2007.

The more positive feel was welcomed, as it followed at least 12 months of tough times during which some companies had struggled.

"The whole city is starting to get a bit of a buzz to it," John Oskam, of JJ Oskam Builders Ltd, said.

His workload was steady, but he said there appeared to be more work on the horizon.

Versatile Homes and Buildings Dunedin owner Peter Grouverneur said the outlook was "encouraging".

"It's been slow but steady [for us] in the past 12 months, so we are ready for an uptake. Bring it on."

While some companies said customers had not yet put pen to paper, others were welcoming confirmed contracts.

Dave Wootton, who runs his own company, said the past month had brought a turnaround, with consents lodged with the Dunedin City Council for two new builds and a third consent about to go in.

"We've been doing OK this year, but it has all been renovations, not new builds. So having three houses about to be started is good."

Mr Wootton said he had made three staff redundant at the end of last year but was now expecting to take on at least one more staff member to complete the three projects and other work in the pipeline.

Jennian Homes Otago aimed to secure one new build contract a month and had not been achieving that in the past six months, owner Hayden Davies said.

However, the company had signed three contracts in recent weeks.

"Fingers crossed we are through the lull, but we will need a few more months to be sure. There is a little bit of a lift happening but it is probably too early to say whether it is a pattern."

Companies said there was interest in in-fill sections all over the city, as well as in larger residential subdivisions in Abbotsford, Waverley, Mission Cove and Mosgiel.

GJ Gardner Homes Otago owner Laurie Mains said five new contracts had been signed in recent weeks, all with Christchurch people heading south after the September and February earthquakes.

He said he was reasonably confident the stronger market interest would hold, but cautioned new building and residential subdivisions could be jeopardised if the council went ahead with plans to review its development contributions policy.

The council proposes to increase charges on developments which place extra demand on existing infrastructure. If implemented as proposed, the changes could net the council an additional $34 million over the next decade.

Extra development costs would be passed to section purchasers and that might be enough to put off potential new home owners, Mr Mains said.

"There is a wider issue here ... It does not just affect potential new homeowners and builders but the economy of Dunedin. Dunedin needs growth. It doesn't need an additional revenue-gathering tax."

Resource consent approvals for new dwellings in Otago are holding steady, Statistics New Zealand figures for July released this week show.

Sixty-nine were issued in July, five more than the previous month and three fewer than in July last year.

The figures are not broken down in to separate local authority areas, but Dunedin City Council chief building officer Neil McLeod said consents also appeared to be tracking steadily in the city.

Sixteen consents were issued in July, with a similar number last month.

LJ Hooker agent Fay Murray said Real Estate Institute of New Zealand figures for Dunedin showed section sales were on track to exceed 100 by year's end for the first time since 2007.

Mrs Murray, who specialises in section sales and has been analysing monthly REINZ sales figures for about eight years, said she had noticed rising interest in sections in recent months and a steady increase in the number of sections being sold.

"I've been doing this [job] for 20 years and you get a feeling when things are heating up. People are now making the decision that they want houses which are warm and energy efficient and are looking at building as an option instead buying an existing house which could require quite a lot of work."

Dunedin section and land and home package sales. -
... 53
2009 ... 99
2010 ... 91
2011 ... (to August 8) 67
Source: Real Estate Institute of New Zealand

- allison.rudd@odt.co.nz

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