Is New Zealand heading for another ‘Leaky Home’ Crisis?

Is New Zealand heading for another ‘Leaky Home’ Crisis?

 

The risks of buying new builds

 

We’re seeing them pop up every over Auckland, a type of home most Kiwis would have frowned at living in 10 years ago but is now becoming the new normal. Terraced houses. Around the world, terraced housing has been the norm for centuries, with cities like London and Brooklyn, these buildings are iconic.

It’s necessary for our city to grow up, rather than out, so terraced houses are one of the best solutions to keep up with our growing population. However, with so many developers jumping on the band wagon of these builds and making the most of the Unitary Plan, are we heading into a new ‘Leaky Homes’ style crisis?

 

The Leaky Homes Crisis

The leaky homes crisis is an ongoing problem with timber-framed homes built from 1988 to 2004 that were not fully weather-tight. The problems often include the decay of timber framing which, in extreme cases, have made buildings structurally unsound. Modern homes at the time were typically inspired by ‘Mediterranean’ design and involved complex roofs, plastered exterior walls, internal decks and small or no eaves. Far different from your typical New Zealand house.

The issues with the crisis were the perfect storm of poor use of materials, lack of skilled labour and a breakdown in the consent process.

 

The new builds of today

Since the Unitary Plan came into effect in 2016 more Auckland land has been freed up for higher density development. Creating opportunity for more private developers to make the most of the ever-rising Auckland property market.

Rising construction costs impacting quality of builds

There are many factors contributing the rising cost of construction in New Zealand, some major contributing factors include a lack of skilled labour (increasing the cost of hiring quality tradespeople and pressure to meet construction timelines with limited resource – amplified by COVID-19 closing the border and immigration), the impact of COVID-19 on supply of materials driving up the price for integral, basic materials and increased demand with record numbers of building consents being issued and many new developments underway with the property market booming.

These pressures create the potential risk of some developers and construction trades cutting corners or finished projects of compromised quality. Council inspections won’t necessarily prevent dodgy work being undertaken, as once something has been checked and signed off, there’s nothing to prove that the work that was checked was not modified afterwards.

A new era of ownership

With the new era of intensification, many new properties are enticing buyers with the more appealing ‘fee simple’ titles. The typical old ‘unit’ or ‘apartment’ that you would think of would usually have a body corporate that owners would make regular payments for maintenance of their property and the block of other homes in the complex it is a part of, or a covenant on the property’s title to limit what owners can do to the property (like colours that can be used on the exterior).

Without these kinds of restrictions, you can’t guarantee that your neighbours attached to you won’t make alterations that will impact your property. From new installations like heat pumps to interior renovations that could compromise the quality and integrity of your property. It’s still acceptable to have a wooden framed intertenancy wall, I personally feel these should always be concrete or pre-cast.

 

We believe older detached houses is still best

Despite the incentives to buy off the plan new builds and newly built homes, you can’t guarantee that in 10 years’ time we’ll be facing another ‘Leaky Homes’ style crisis. Of course, not all new homes are bad, as there are many homes that were built in the Leaky Homes era that are completely fine. However, it is concerning when you consider the above factors when thinking about purchasing a new home. Can you really trust some of these new builds?

We still think buying existing free-standing homes is the safest strategy, or developing your own new builds to know with more certainty the quality of what you’re investing in.

If you want to know more about why we avoid new builds, come along to our next work shop: CLICK HERE

 


 


Lucia Xiao  |  support@luciaxiao.co.nz