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Buying land (section) and planning a house

Te Kouma is a small settlement 10K south of Coromandal town. Why are we including it in places to live? Well it looks like we will be moving there in the next year.

So it gives us an opportunity to document the process of buying a plot of land and then getting a house built on it.

So if you have ever thought about going down this path, or have never ever thought about it (it's not something that's common in the UK), we will document the process and all its problems. This could be a horrible mistake!!!

For house building info: http://www.buildingguide.co.nz

or look at the building guide website at the bottom of this page

The following wiki is more oriented to buying a rural section, a much easier route is to to buy a section on an estate and choose your builder and design. All services will be available, so no hassle with water, sewage, electricity and comms.

Buying a section

OK lets skip the bit about how we decided where we wanted to live, and how we decided what we could afford - we spent months investigating various places, and setting a land budget. In the end we decided we wanted to live close enough to Auckland that we could get there and back in a day if necessary, and we set a budget that we thought would give us a reasonably sized plot with a decent view. Of course, we overspent our budget, but I think we got our decent view.

The process of buying land is the almost the same as buying a house in NZ, or a suitcase in China!

  • The section has an initial asking price x
  • Terri signs a document with the estate agent stating we will offer y (well below x)
  • Vendor comes back with x-$10k
  • Terri offers y+10k
  • Vendor returns with x-$20k
  • Terri offers y+15k
  • Vendor agrees
  • Terri breaths sigh of relief

The main difference between the land and the suitcase is that the offer for the land is a contractual document. It is very important that the negotiation document contains some 'get-out' clauses. These are usually 'Subject to land survey, LIM, covenants and finance'. Also make sure the purchaser is 'John Doe or Nominee' - then the final sale documents can be for an individual, family trust or (if buying an investment property) a company. (The negotiations normally take a few hours, but in our case the vendor was in the UK and so it eventually took 4 days) The actual date for completion is also written into the offer document.

Note: All offers and counter offers are legally binding apart from the get out clauses of surveys

We now contact our solicitor for him to start the searches etc. The standard period of time to confirm everything before the offer is 'unconditional' is 15 days, but many Real Estate agents will try and push you to accept 10 days. Don't be pushed if you don't feel happy.

When the offer is 'unconditional' the purchaser provides 10% of the sale price.

For us, the most important survey required is the Geotechnical report. This report investigates whether the land is suitable for building on, or are there going to costly foundations etc. The cost of this report is around $2200. (Report ordered Sept 23 2010)

House plans and choosing a builder

Finding a builder is as easy as searching the internet. All will offer a turnkey design and build or anything in between. Prices seem to be in the range of $1200 to $2200 per metre squared for an all in package excluding drives drainage etc. The packages include:

  • Site inspection, Geo report, contour survey, Building application fees, guarantees etc.
  • Kitchens with oven, hob, dishwasher etc.
  • All bathroom fittings
  • wardrobes,
  • Painting
  • Concrete floor
  • double glazed windows
  • High standard of insulation
  • floor tiling and carpets.

Right we have searched the internet for builders and plans, this just gets more complicated! Seems all builders employ architects, so a chosen plan can be the start or the finish of the design, this can be time consuming, but paper is cheap!

We have met with a couple of builders and lots of show homes. This morning (still sept 23) we had a meeting with Sovereign homes and felt comfortable with the manager (Bob) and their architect Robin. They got a couple of quotes for the Geo survey and we duly passed over the cheque. We are not committed in any way at this stage, just in the prelims. Their prices seem to be average and build quality good. Also they do not franchise out their work, this is quite common in NZ.

We now have to compromise between ourselves on our expectations and budget.

A few points we have picked up

  • Concrete floors are generally a little cheaper than timber
  • Metal roofs near to the sea can be more expensive than tiles (higher grade of steel)
  • Mono-pitch roofs are dearer than normal pitch roofs

Now Oct 1. We have put our heads together and adapted a standard design from the Sovereign range. I have drawn up our ideas on Autocad, this saves Architects fees and or getting commited to a builder. The plans have been emailed to Sovereign to see if we are still in budget. I have prorated the cost per square metre against the original, but we have loaded added loads of extras.

We paid out our $2000 for the Geo survey and upon reading it, did not seem to bad from a lay persons interpretation. Sovereign staff though came back with the conclusion, it would cost between 80 to $100,000 for the foundations and drainage. We passed the reports to our solicitor, and we have canceled the purchase!

So thank you Bob Pelham and Sovereign homes for saving us a lot of money and grief.

Do not be put off purchasing a section and building your own choice of house, this can be much cheaper than buying ready built and of course the house will be up to 2004 building code i.e. a lot cheaper to run. Our problems were caused by attempting to build on a steep sloping rural setting with no main drains.

We have bought a field, Miranda

Jan 15 2011 - Terri has searched out 'nowhere' and bought a field in the middle of it, so here we go again. We agreed to keep quiet about this, but I see its posted on Facebook. The field is literally a cow field with no amenities whatsoever (but it does have a marvellous view), so we have to arrange for an electricity supply, rain water storage and sewage treatment. No problems there, then!

Jan 18 2011 - The negotioation has finished and we are now in the due diligence stage. We still have not paid over any cash, but we will pay the deposit in a few days assuming nothing nasty comes out of the woodwork. I have contacted the electricity supply company, a water tank supplier, sewage treament company and Waikato council - all came back within a day and have been really helpful, now thats good.

The field is 7800 metres squared, but only 30% is suitable for building on.

The Pit, Cannot build here

Terri here - I like to call it 'The Nature Reserve…'

You may be able to see the sea and the Coromandel in the distance. Its a long way away. Not much chance of flooding, we are 200 metres above sea level

House Build in Red Beach North Shore

Jan 2011. We have friends living at present in rented accommodation whilst their house is being built. This is excellent timing, in that we can pick their brains and hopefully avoid any difficulties they encounter. Their section is 3 times the size of ours and their build is much more ambitious, but still requires the same services that we will need. The chosen house builder is Golden Homes http://www.goldenhomes.co.nz/. Golden homes differ from the main stream of builders in that they using metal studding for the construction, this has the advantage that is does not rot, is fire resistant and does not warp. In my former life has a project manager I always specified metal stud. The majority of NZ builders still use timber studs, in that it readily available from NZ forests.

Pam the project manager has passed on a few budget costs, such as Tanked water supplies around $12000, Effluent treatment $16000, their electricity connection charges will be dependent on the site and distance to the nearest transformer, or a new transformer will be required (expensive). Waste disposal units are not allowed with on site effluent removal and only green type cleansers are allowed because of killing the good bacteria (sounds like a yoghurt advert). So there goes the bleach I use everywhere and more composting, we already have a worm farm for all the tea bags and raw veggie wastes.

Pam has flagged up some extra costs that you would never dream off and I do not know if they apply to all builders. All builders try to keep the basic cost per square metre low for obvious reasons, but Pam is being charged for scaffold hire, bringing the drainage to one point for the effluent treatment etc. Golden homes do not include Carpets or floor tiling and more than 3 colours of paint are extra, also only one dual socket per room as standard This I have found appears to be common with a lot of builders.

We are still seriously considering using Sovereign for our house build, mainly because of all the help they gave us on the Te Kouma section, and so it will be interesting to see the differences between companies. We have almost chosen the house design, the Crown design almost meets all our needs, with few changes required. SEE:Builders List

The most important point is quality of build and value for money, we are going to after pay for all features whether as standard or extra

Even if you eventually will have a concrete drive and hard standing, do not include it in your plans otherwise the council will not sign of your house until it is complete

Red Beach Revisited

The Section

Update 1

Things have moved on apace since we last met up. Their section is huge, with Kauri trees and a duck pond, the photos do not show the real extent of their property. The house will make ours decidedly small and the internal specs. are well, luxurious.

Update 2

August 2011 and our friends have moved in. The last two weeks had there share of minor dramas, a workman left a bi-fold open and high winds that night blew them off, then the flooring apprentice managed to get green gooey resin over the walls, also the expensive ducted heat pump system was not gassed up until 4 days after they had moved in, giving them a few cold nights.

Due Diligence

Feb. 1 2011. Due diligence is due to end this Friday, and as we have not found any serious problems with the land we now have to pay 10% deposit. Our solicitor is still negotiating over certain covenants on the property, these are not show stoppers and were only added by the vendors solicitor at the last moment to stop a tatty caravan or garden shed type building being erected.

I have added some informed budget costs for services:

  1. Electricity supply 150 metres from transformer: $14,266 Quote form WEL, Bugger!
  2. Sewage treatment $18000 SEE: Sewage
  3. Water Storage $12000
  4. Solar water heating $5000
  5. Solar Power $16500 SEE: Grid Tied Solar Power
  6. Telecom $420
  7. Piling $10000
  8. Excavations $10000

A few nominal $10000's included, hopefully over the top a little, we shall see. There will be loads of other extras on the house, could get expensive.

Looking again at solar water heating and pv cells for some power generation, quotes coming in at Approx $15700 incl. GST for a 2kw grid tied system.

The cost as come down dramatically since last year

March 1 2011: This is slow for NZ, but our solicitor has finished the negotiations with the vendors solicitor to remove unreasonable (we think) covenants on the land. Still only paid the deposit.

March 15 2011: Sovereign Homes has gone bust. The slow down in NZ house building has claimed them. Now its back to revisiting the other builders. This time we have the house plan from Sovereign and we can get quotes based on that plan.

In retrospect we fell in with Sovereign because they were so helpful and they had a standard plan that fitted our needs, but after trawling the larger builders, we have found many more options, confusion reigns once more!

March 20 2011: Field is now unconditional and in 10 working days we have cough up all the money.

April 11 2011: We now own a cow field. Next choose a builder.

NZ Builders List

March 16 2011: In the last week I met up with the following 5 building companies and asked them to quote on the plan I had from Sovereign for a comparison. The companies packages are very similar, but I will try to document the differences. The Sovereign price was $1326 per metre squared incl. most fees etc.

Platinum Homes: $1280 per metre squared, but excluding, draughting fees, council consent etc.

GJ Gardner Homes: Never got a quote due to showhome being 35% extra after all upgrades

Fowler Homes, Auckland: $1354 per metre squared

Jennian Homes: $1309 per metre squared

http://www.davidreidhomes.co.nz/: Did not get quote but at $1700 to $3000 per Square metre, probably out on price.

I have met Jennian and Platinum builders on site to get an estimate for ground levelling costs, Jennian was $6250 and Platinum was $7300, but this includes a metalled drive (gravel). In my budget I allowed $20,000 for piling and excavation, so for once I can pull costs back a little, or in reality spend it on other extras. (April 12 2011)

Update Sept 2012: I have had excellent reports about Classic Builders BOP www.classicbuilders.co.nz/. The client was given a schedule of works, including what day each contractor would be on site, to which they stuck to. Excellent standard!

Transportable Homes

There are other options to building your own house through a builder and that is transportable homes, these are modular units that come on the back of a lorry to your section. The price includes the house and siteing, but excludes the services. These houses are built usually of wood or some sort of weatherboarding, but conform to the current NZ housing code and so are well insulated and double glazed. The price per sq. metre is similar to a conventional build but a much quicker process and can be sited on far from ideal sites as they are usually mounted on wooden pillars and so work out cheaper if the site required extensive foundations or piles.

SEE: http://www.kth.co.nz/

http://www.latitudehomes.co.nz/site/default.asp

http://www.keithhayhomes.co.nz/

http://www.sunshinehomes.co.nz/

There are plenty more on the web

Rural Sewage systems

Using this area for my reference. Found the following companies on the web. Some systems have a low wattage fan operating 24 hours a day, apart from continuous running costs, sounds like a replacement fan every few years.

Oasis have the Clearwater Z54 with no fan, but needs good drainage and low water table ($9200 to $14000 incl. GST), since found out this system too small for 4 bed house, so Oasis Clearwater Series 2000 System recommended, but has 24 hour fan.

The Reflection company has two pumps that operate on demand and no fan. Verbal Quote of $14000 incl.GST

Dave Miller, Independent Design Engineer

http://www.oasisclearwater.co.nz/domestic.html

Reflection Treatment systems :$14000

Hynds Domestic systems :Fan 24/7

Biocycle: Another aerated system, i.e. fan running 24/7 : $13000

March 19 2011: I have contacted Dave Miller, his fees (all incl. GST) are $1437 for a site visit and assessment with recommendations, $575 for a design and $173 if the council requires site drawings. Pretty certain this is the route I am going to follow.

Dave came to site and forwarded his recommendations, these are available to view see: New Situation

Do look into sewage systems carefully, maintenance costs can be high plus the local council may insist on checking out your system once a year and charging you for the privilege

Grid Tied Solar Power

Quotes for Solar power, about $1000 extra for concrete tiled roof, incl. in price below

http://powersmartsolar.co.nz/ 2.1KW $16745 3.0KW $22745

http://www.whatpowercrisis.co.nz/

http://www.kmsolar.co.nz/

Update Aug.2011: Solar has come down substantially and we ordered a 3kw system from powersmartsolar for $15350 SEE: http://www.arttel.co.nz/weather/solar.html

We have a new situation

May 10 2011-I cannot comment too much but things are changing fast, will report when the situation is less fluid

June 2 2011: In early May we were surveying the field, well Terri was tramping around the perimeter with the GPS, this is not too easy in that some of the boundary is quite steep. I managed to delete the first set of way points and sent Terri off again. Whilst Terri was slipping and cursing her second trip round an estate agent with mallet in hand put up a notice for an Open Home just down the road. Terri of course wanted to have a look, but I am against nosy people wasting vendors time. The compromise was that I drive past and we have a gander. Nice house but probably out of our price range now that we had the field so home we went. Terri of course was on the internet within 5 mins. of arriving. The outcome of this was I had an appointment with the estate agent the next day with “Executive powers” as Terri was off to Wellie.

So we have bought a house 1.5 K up the road with 33 acres of land, 10 acres pasture and 23 acres of native bush, our budget is blown and if anybody wants to buy a field with great views, plans and all budget costs available, in Miranda please contact us. In reality we will wait until the spring before we advertise it, we may even put electricity and comms. on site to make it easier for purchasers.

So it seems we are doomed not to go through the house building process, but we can of course relate how our friends in Red Beach are progressing.

Actually I was looking forward to the building process, we probably only get one chance in our lifetime to undertake something like this!! SEE:Miranda / Maramarua, or living out in the Sticks

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New Zealand House Building Guide

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