"I have been amazed at the prices to build. They are about twice what I could build the same house for in the US. This is hard to understand since many of the materials are (lumber, stone) are from NZ and the labor rate is cheaper. We own the land so it is just construction cost. The house would be considered upper middle class nice in the US but nothing really special. The builders in NZ seem to be somewhat confounded".I agree. Not sure why this person built a new house as that is the most expensive approach. There is plenty of housing stock around, and with interest rates about to go up because of inflation, I hope you have a low debt. It is expensive to build I think for five reasons:
1. Huge mark-ups on materials - did you buy the materials online? Should have got a list of materials from the architect.
2. Labour rate can be cheap - unless you use one of these national franchises. A lot of local labourers head to Australia for higher rates, so can be tight in areas.
3. Not all materials are made in NZ. A lot of things are imported. i.e. the high cost components.
4. There is a lack of competition compared to the USA
5. There are a lot of building regulations which effectively lock out handymen, who might otherwise provide some competition
It is so much cheaper to just buy an old house and renovate. Hamilton is a bit of a growth area, so maybe you had no choice. Anyone seeking to buy a house should rent for 1-2 years until inflation starts to hurt existing home owners. There are houses for sale in some areas which will only cost you $0-30,000 over land prices. Building the equivalent sized modern home would cost you $120,0000 and yet the old home is made out of quality hardwood which wood last another 100 years if well cared for.
If your a voter - that's the price you pay for supporting governments who embrace easy monetary policies that spark asset inflation.