Building a House in NZ – One Person’s Journey

What will we cover?

• Our building story – to set the scene,
• The costs to build,
• Our biggest mistakes,
• Our best decisions,
• How we managed the money.

 

Our (short) building story

Ten years ago, my husband and I started dreaming about life outside of the city. At that point, the idea was only a dream.

He was born an Aucklander; I moved there to study and find my career. We always knew that pathways open to you if you do the hard yards in a city like Auckland. After many years of persistence in reducing the mortgage, the dream got closer.

We wanted land, trees, space, and a quieter lifestyle. Certainly not an easier one, as people with land can attest to!  More a chance to raise our daughter in a quieter part of NZ with a strong community around us.

They say timing is everything, and this is certainly true for us. During a short holiday in Wellington, we thought about what was keeping us in Auckland. The city had helped us get to where we were today, but now was time for a change. So, the house was sold, and with money to start looking, we began the search.

During another holiday, we said we would ‘just look’ around at land… famous last words. ‘Just looking’ turned into just buying 10 acres of land.

We’d never owned rural land before, so up a steep learning curve, we went. Easements of driveways, resource consents, and district plans. Our seasoned landowner friends must have gotten tired of the myriad of questions we asked! But we got through the jargon and legalise.

Some quick tips on buying land

• Do your due diligence before you buy or sign. Don’t be afraid to make the contract conditional on areas where there is unsurety. The real estate agent will answer many of your questions.
• Read the district plan – find out what you can and cannot do with the land before you sign the sale and purchase agreement.
• Get a site assessment report done on the land – what type of soil do you have, is the property in a high wind zone, or somewhere with a lot of flooding and rainfall? Are there fault lines or heritage sites to consider? A desk-based assessment can be obtained. They are not expensive and will help you see what you are building on.
• Understand any easements – do you share a driveway? Is there phone and power to the site or just to the end of the driveway?
• Where will you put the house – remember, the further away you put the house from the services, the higher the costs!

The building phase

What was the scale of the build? Our budget was $500,000 excluding the cost of the land, water tanks, greywater system, architects’ fees, council costs, etc. Total size, 154 square meters, so, not a mansion. Just a nicely designed, well insulated, as-high-a-quality home as we could afford. 

The type of house was very important to us. Instead of putting money into building a garage onto the house, we chose to have better windows, more insulation and a more comfortable home. 

During the build, we had a perfect storm of delays, rising costs, and weather and we had to completely replace the building subcontractor.

The build took 18 months longer than expected and cost more money than we thought. Some of these things were inevitable, as building never goes perfectly to plan. What kept us sane was our belief in the result. We have now been in the house for over two years, and our focus has turned to developing the land and the lifestyle we always wanted.

While the process had many challenges, ultimately, we are happy and are enjoying the hard work.

 

Biggest mistakes we made

There is no doubt, we made some mistakes along the way. Nothing that had us rethinking our decision though. Here are our biggest ones.

• Choosing the wrong builder – do your homework. Speak to their previous clients, look at their work, and ask locals for suggestions.
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• Getting too involved – after a year of renting and rising rental costs, we chose to move on-site. This was a blessing and a curse, as you are there to monitor progress, but you can also get too caught up in the day-to-day.
• Not asking enough questions – no question is dumb; this is your money after all. We now know, we should have asked more along the way.
• Not putting our foot down on some issues – when you pick the right battle, fight for what is right. We should have moved on from our first builder much sooner than we did.

 

Things that kept us sane

While there were some mistakes, we made some good decisions too, ones that got us through.

• Planning – Have a very good list of what everything costs, break this down into detail, and allow for as much as you can. 
• Time away from the house – Make sure you set boundaries around how much the ‘house stuff’ controls you and take time away to unwind too.
• Being patient – We have had to be. We can’t control the subcontractors, the weather, the council, or much else. We had to say, this house will be done. Take each day one step at a time, be informed, and be realistic.
• Communication – when we were more informed, we could start sorting out issues and making sure there was regular communication between all parties.

Dealing with the money

You can never do too much planning around the money. There are a lot of costs to consider, and you want to avoid surprises if you can.

• Being real about the budget and having a very big contingency fund.
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• Sticking to the budget and being firm with the building company. I didn’t care if they called me tight, I wasn’t going broke to build this house.
• Track the spending
• Allow for the worst – we started off by using our own money before we got a mortgage, and we are always looking at ways of keeping that mortgage down. Check out our other blog for ideas on managing your spending.
• Contingency fund again. I can’t say this enough, make this as big as you can!
• You may have your house fund ready to go, but do you have an emergency fund too? Life still continues, things break, and you want to live comfortably day-to-day while building the house.

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Final thoughts

If I was, to sum up, the biggest lessons we learned about building, these would be to go in with your eyes very wide open. Where possible reduce the risks and for us that meant the surprises. As humans, we can deal with a lot, but a lot of financial or emotional surprises can send us to the edge quickly. Ask as many questions as you can and do your research, even if you are building a ‘turnkey’ house. There are still many areas they don’t tell you about.

When you get the right house, this is worth the effort, especially if this is going to be your ‘forever’ home. Remember to set aside the issues you have had at the end, celebrate and enjoy the house… you deserve the moment.

 

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Article by Kim Gabites (Inside My Money Founder)

www.insidemymoney.co.nz is an online financial learning hub, helping first home buyers gain more financial know-how and confidence.