It’s no secret that there have been a lot of challenges in the wider economy in the post-Covid lockdown years, which may have made some people hesitant to consider building their own home. But for those in the know, there are plenty of reasons why now is the time to get in quick and take advantage of some truly beneficial market conditions.
We had a chat with Sentinel Homes’ Founder and Managing Director, Stuart Shutt, about what he’s been seeing in the wider market—and some of the key reasons why now is the perfect time to build the home you’ve always wanted.
One of the big impacts in the housing market over the last few years has been the rise of interest rates impacting mortgage holders and borrowers. However, with the official cash rate (OCR) dropping to 3.25% and banks cutting their interest rates, Stuart says that we’re seeing a more solid time in the market. “OCR interest rates and overall inflation are now pretty much under control, so while we might see another small drop, it's probably going to remain about where it is now because we've entered what's called a traditional stable market,” he explains. “For those looking at borrowing that means interest rates probably aren't going to fall a lot more. That stability is a good sign when assessing the financial metrics for building a home.”
Stuart explains that these market conditions are giving those in the know the advantage when it comes to construction and property investment. “The astute people that understand the financial markets, they're the ones that are coming out to play first because they recognize the stage of the property cycle we're in.” Stuart says from his perspective, all signs are pointing towards now being the optimum time to build. “The construction and the housing market in New Zealand generally follows a seven year boom bust cycle. That’s been the case for over a hundred years, and at the moment we're at the bottom of the next high. We've got a stable market, all the indicators are right and things are starting to take off now. So if you embark on something now, by the time you're finished, it's going to be worth a whole lot more."
For over ten years, New Zealand saw a building boom with residential consents rising from around 14,000 per year to a peak of 51,000 in 2022. Although there were many positives to come out of this, increased demand for quality materials and skilled labour became increasingly scarce and more expensive. Now that the construction market has cooled off, builders are able to take advantage of better rates and more availability. “We’re currently building houses faster and cheaper than we have done for a long time,” Stuart says. “For the first time in a long time our resources are no longer constrained. We have much better negotiating power now which means we can go out and get far more competitive quotes. It's definitely a more efficient time to be looking at sourcing both labour and materials.”
Another area which Stuart and the Sentinel Homes team have been seeing significant changes is in the ability to get approvals and expert advice in a timely fashion thanks to fewer consent applications and less work out there for skilled consultants. “Under the current conditions we’ve been seeing professional services dropping their prices and councils their timeframes,” he says. “Council consents are being processed faster and we’re able to get the people we need on site when we need them, which is of course a good thing for both the build and the budget.”
Land in New Zealand is always at a premium, but in Stuart’s opinion you’re unlikely to find a better deal than right now. Buyers are seeing the benefit of a higher availability and improving interest rates. “Land and section prices are probably the lowest they're going to get. They're lower than previous years, but it's just starting to turn,” Stuart explains.
With conditions the way they are now, Stuart encourages people to do their research and not miss out on the opportunity it provides. “There's always that fear of being first, but we've reached the bottom of the market and we're starting to turn. It’s easier to get finance from the banks and our data is showing that things are only going to go up from here, so if you’re thinking about buying a section now’s the time to get on to it.”
As Stuart sums up, if you’re thinking about building a new home or property, right now is the right time. “Land prices, building materials, professional services and consultants are all probably as low as they're going to get,” he says. “The sooner you get in, the more gains you're going to see, because it's only going to go up from here.”
Trying to get a build underway can feel a bit daunting, Stuart says that the Sentinel Homes team has all the support and advice you need to figure out the finances and get started with your project. “The advantage of being a national company is that we have experts on hand to guide the process,” he explains. “Our finance experts work with all the banks and have an in-depth understanding of construction to help you with your finance.”
Although Stuart encourages people to get in sooner rather than later, he emphasises that Sentinel Homes never puts speed above quality or service. “We're quick, but we care. We're actually going to tailor something that fits you and back it with an independent Master Builders warranty,” he says. “We’ve got the size to keep prices sharp, but we stay small where it counts - with great service and a tailored experience.”
Thinking about building in 2025? Get in touch with your local Sentinel Homes team today.
Let’s get together for a free, no-pressure meeting with one of our team, at your place or ours.
We can't wait to hear your ideas!
