Latest / Early Edition with Ryan Bridge / Mike Blackburn: Blackburn Management Owner on the increase in building costs in the last four years

Transcript

Mike Blackburn: Blackburn Management Owner on the increase in building costs in the last four years · Early Edition with Ryan Bridge

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  Speaker 1: The New qv Cost Builder study shows that there has
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  Speaker 1: been a huge increase to building costs over the past
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  Speaker 1: four years. The study looked at the comparative cost of
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  Speaker 1: a standard one hundred and fifty meter square home over
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  Speaker 1: six main centers. The average increase was described as staggering.
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  Speaker 1: The number is forty four percent four percent more expensive
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  Speaker 1: than four years ago. Biggest increases part of the north
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  Speaker 1: Tonedin and Wellington. Mike Blackburn or Blackburn Management, is a
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  Speaker 1: construction analyst and joins me, Now, how are Mike.
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  Speaker 2: Good morning, Andrew, how are you.
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  Speaker 1: I'm good. I remember the great JIB crisis, during the
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  Speaker 1: COVID and of course at supply chain crisis, but then
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  Speaker 1: I thought we got over that. So where are all
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  Speaker 1: these costs coming from?
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  Speaker 2: Well, look, Andrew, you are absolutely correct. So because this
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  Speaker 2: report does cover that four year period back to twenty
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  Speaker 2: twenty one, the most of those increases would have occurred
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  Speaker 2: during that twenty twenty one and twenty twenty two period. Look,
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  Speaker 2: the really, really good news is is that the last
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  Speaker 2: twelve months, the increase and I measure this on a
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  Speaker 2: cost per square meter basis, the increase across average across
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  Speaker 2: all of New Zealand is only three percent, so the
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  Speaker 2: bulk of those increases occurred during that period. Now, also
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  Speaker 2: bear in mind is that during that twenty twenty one
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  Speaker 2: and twenty twenty two period we actually went through the
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  Speaker 2: biggest building construction boom that New Zealand has ever seen.
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  Speaker 2: And of course from twenty twenty two through to twenty
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  Speaker 2: twenty four, building consent numbers have fallen away quite significantly.
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  Speaker 2: And of course the feature of the construction industry is
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  Speaker 2: that as the market gets quieter, builders merchants and builders
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  Speaker 2: and developers become a lot more competitive. So we certainly
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  Speaker 2: had seen a significant slow down in the increase in
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  Speaker 2: the cost of building over this last two year period.
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  Speaker 1: Yeah, but it's still forty four percent more expensive than
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  Speaker 1: it was four or five six years ago. Someone has
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  Speaker 1: to hold that cost. Now, just looking at the products
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  Speaker 1: we import a lot of products. Should we do that less?
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  Speaker 1: Should we be making more?
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  Speaker 2: Well? Look, look, a large percentage of building materials are
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  Speaker 2: manufactured here in New Zealand, or at least from raw materials.
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  Speaker 2: We sort of see a lot of all the aluminium
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  Speaker 2: windows are sort of assembled here in New Zealand. Obviously,
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  Speaker 2: timber framing a lot of that sort of stuff. One
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  Speaker 2: of the things that the proposed new government legislation is
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  Speaker 2: looking at doing is looking at making it easier to
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  Speaker 2: bring alternative products into New Zealand so that we're not
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  Speaker 2: limited to just the handful of products that are currently
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  Speaker 2: coming in. And of course all of these things will
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  Speaker 2: contribute to making it easier, simpler and cheaper to build.
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  Speaker 1: All right, Mike, I thank you. Mike Blackburn. He's a
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  Speaker 1: management consultant business advisor, works across business companies and developers
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  Speaker 1: and professionals, and each month Mike produces a variety of
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  Speaker 1: detailed reports and analysis of all sorts of building cons
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  Speaker 1: and activity.
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  Speaker 2: For more from early edition with Ryan Bridge, listen live
• 3:04
  Speaker 2: to News Talk Set B from five am weekdays, or
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  Speaker 2: follow the podcast on iHeartRadio