Meeting the Demand for Affordable Housing
New Zealand faces a major housing shortage. There is a need to build more than one hundred thousand homes here over the next ten years. And more than half this demand is located within in the golden triangle of Auckland, Hamilton and Tauranga.
New Zealand faces a major housing shortage. There is a need to
build more than one hundred thousand homes here over the next ten years. And
more than half this demand is located within in the golden triangle of Auckland, Hamilton and Tauranga.
There are a number of contributing factors to this scarcity including
previously large inbound immigration numbers, averaging 70,000 for the last 4
years, which this Government continues to support.
Iwi have also signalled they are aware of their own housing crises and are
looking for solutions to enable the provision of
affordable housing on their own land.
Land and house speculation, infrastructure underspend, cost of materials,
expensive building methodology, and high compliance costs, have resulted in
demand not being able to meet supply at this level of the market. The current Auckland building prices are $2,800 to $3,500
per sqm - plus the land and building consent costs.
This coalition Government recognised the problem but is now no longer guaranteeing 100,000 homes. However
Phil Twyford, the Minister for Housing, has stated that prefabricated housing is going to be a major
part of the solution to the shortage and has committed KiwiBuild to provide this type of affordable
housing.
The solution to meet this
demand
There have been many suggestions as to what the Government might do but now we have a New
Zealand owned business that can offer a real solution.
FirstBuild has been set up a by a group of
people experienced in the housing industry, specifically to meet this demand
and the price point given above. It has already registered its interest with
KiwiBuild and is currently in the second round of the tender process.
FirstBuild Construction Auckland Limited (“FBACL”) has been set up to construct
the modules and deliver the houses. As part of the strategic plan, FirstBuild
will set up a separate sales company, FirstBuild Homes Auckland Limited, to act
purely as a sales and marketing company. This company will not run at a profit
(with all the profit being retained in FBACL) removing all building risk to the
construction company and its investors.
FirstBuild brings together innovation, business and industry experience with
technical and construction expertise, to provide a solution to the problem.
FirstBuild plans to construct the modules in an assembly plant, transport and
erect the houses on site.
This building methodology, well proven and refined in overseas markets in
America, Europe and Asia, will provide a significantly reduced cost of buying a
house (to approximately $1,700 - $1,900 per sqm), reduce the cost component of
land, and reduce the build time from an industry average of 25 weeks to less
than half that time.
To date, FirstBuild has:
- Designed a suite of houses that significantly reduce the house and land prices by building two story homes that reduce the land footprint;
- Developed plans that offer a choice of 1 - 5 bedrooms (57 - 163 sqm) and a different exterior “look & feel” (see preliminary designs here);
- Achieved designs that meet the New Zealand Building Code 3604 and include a 10 year warranty backed by Lloyds of London;
- Designed a methodology with rapid build times by reducing the average industry build time from 25 weeks to 6 weeks, using factory assembly and onsite construction;
- Set up and independent domestic & international material supply channel that is not part of the current monopoly supply in New Zealand, thereby significantly reducing the cost of raw materials;
- Established partnerships with land developers to pipeline land at a price point and topology suitable for affordable houses;
- Integrated solar and smart home technology, that is standard with all houses;
It is now raising capital to implement this realistic non-government solution to the affordable housing crisis.
The Offer
FirstBuild Construction Auckland Limited (“FBCAL”) has been set up to construct the modules and deliver the houses. As part of the strategic plan, FirstBuild will set up a separate sales company, FirstBuild Homes Auckland Limited, to act purely as a sales and marketing company. This company will not run at a profit (with all the profit being retained in FBCAL) and will remove any building risk to the construction company and its investors.
As an initial offer, FBCAL is seeking $800,000 to deliver 4 house and land packages in Auckland with a sales price of under $650,000 each. A fifth house will also be built as a showhome to secure future sales. They currently have a showhome investor ready to buy that property. The intention is to use the profits from this initial project to build the business.
Once the initial of 5 houses has been completed and further sales secured, the business intends to raise further capital to progressively build manufacturing capacity which will include semi-automation.
Investors in this initial project will have the first right of refusal to invest into these further capital rounds.
Want to know more?
If you’d like to know more about this Offer, reply to this newsletter or email me at john.paine@tbkcapital.co.nz or call me on +64 21 902 901.
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The above investment is not
an offer of financial products that requires disclosure under the Financial
Markets Conduct Act 2013 (Act) and is available only to wholesale investors as
defined by that Act. It is intended for distribution only to selected
people to whom, under the relevant laws, it can be lawfully distributed. It
cannot be distributed in any other jurisdiction, or to any other people. It is
not an offer or solicitations in any jurisdiction in which such offers or
solicitations are not authorised, or in which the person making such offers or
solicitations are not qualified to do so, or to any person to whom it is
unlawful to make such offers or solicitations. Any representation to the
contrary would be unlawful. No action has been taken by any person that would
permit a public offering in any jurisdiction where action for that purpose
would be required.
Cheers
John Paine B.Sc.,
Dip BIA
TBK Capital Limited
Level 10,120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901
Email john.paine@tbkcapital.co.nz
For more information, please click the contact button below to send us a message.
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