What is your square metre rate?

Square metre rate for building a house

What is your square metre rate to build?

Anyone who’s watched Grand Designs knows building a dream home risks being a recipe for budget blowouts.

Which is why some New Zealand housing companies assure their clients that this won’t happen by promising them a magical, low square-metre rate. These can be enticing to new-home builders – especially when accompanied by exclamation marks in sales materials to really impress: “ONLY $1,600/sqm!!!” – because they seem to simplify what can be an overwhelming experience.

But, although these rates can be tempting up front, many New Zealanders building homes are discovering – too late – that the attractive low-rate simply does not include the actual required costs to complete the home they envisage.

Asking the right questions

Square-metre rates can be misleading and unrealistic, because they either don’t include a number of compulsory external costs or don’t take into account the specific demands of a client’s unique site and vision. So, whilst they may appear to minimise the risk of a dreaded Grand Designs-style budget blowout, in reality they make this much more likely.

‘disputes over final cost were more common for those who selected their builder for fixed price certainty or the lowest price than for other reasons.’ BRANZ 2019 Report

NZ Living Homes director Chris’ has some advice to anyone looking for a home-builder. If you are comparing square-metre rates, be sure to ask a few questions and make sure the rate includes the following unavoidable essentials associated with a build. These can often be left out of a square-metre rate to make the initial offer more inviting:

  • Fees and permits
  • Consultants and council fees
  • Groundworks and site works
  • BRANZ levy
  • Development contributions

The full picture

Even if a square-metre rate does include all of the above, there are details specific to each and every individual, home and site that need to be understood before a builder can start throwing out numbers.

With the 2019 BRANZ report showing 23% of new house owners had a dispute with their builder over the final cost, it’s essential that builders get the fullest possible picture before giving costs in order to avoid disputes down the track.

NZ Living Homes director, Chris says, ‘Of the most importance is to establish a budget with the client and what that budget needs to include. Then the designer should work back from that starting point in conjunction with the builder to come up with a design that suits. The overall cost can be increased or decreased by way of adding or taking away levels of complex architecture, choosing the correct building system and reducing the level of fixtures and fittings by the client.’

‘Another very important method of reducing cost is to design well to minimise the overall size of the design. Our experience tells us that most clients realistically will need to spend between $2,250 and $2,750 per sqm to complete their projects. However, we have completed designs for people who have spent as little as $1,800 per sqm and up to $5,500 per sqm. Each client is different and so are the projects we deliver.’

Chris says, ‘one thing that’s certain is that going through the right processes of getting to know a project and client before estimating costs leads to better budget outcomes and happier clients.’

Getting to know clients and their dreams, to find the right solution for their budget, is one of the great pleasures of his 20 years in the building industry. ‘Every client is unique, as is their budget and the home they envisage. All of this can’t be reduced down to a per-square-metre number without first getting to know them and the full picture of what they want to achieve.’

NZ Living homes runs an open book policy

We’re completely transparent in our pricing process.

If you’re looking at a build and want to get a better understanding of how costs are assessed, sign up to our newsletter below and we’ll send you a copy of our Standard Concept Specification form. It sets out absolutely everything we go through with our clients in getting to know them and their vision.

If your builders are talking money without going into this level of detail, we’d suggest this could be a recipe for cost issues down the track.

    We’re always happy to chat anything build related, so don’t hesitate to give us a call or email us at hq@nzlivinghomes.co.nz if you have any questions or worries about building costs for your current or future projects.