Property investment - has the game changed?

Why do Kiwis spread out and not down for home expansions? DARIA KUPRIENKO finds out

”In London you have the super-rich building down with swimming pools, cinemas, game rooms underneath.”

Overseas conversions of basement into a bedroom, a game room, or even a pool is a common trend to extend the footprint of the house. But in New Zealand we’re building out and up but rarely down. We asked building experts, how come Kiwis are not big on underground living? Director of architectural engineering company Oculus, James Powers, says only the richest homeowners would add a basement to a house in New Zealand. "It costs about two to three times more to build downwards than to build upwards.” Basements are expensive because the process is too complicated, Powers explains. You need to dig a hole, prevent the building from collapsing into that hole, waterproof, insulate and ventilate. "The biggest risk is damp, as you have a limited amount of air getting in and there's plenty of bad examples.” Basement living is common overseas, particularly in colder climates such as England and Canada as it helps the building to stay warmer, Powers says. "In London you have the super-rich buying the property in central city and because they can’t build up there, they are building down with swimming pools, cinemas, game rooms underneath the old terrace house,” he says. “New Zealand only just started to intensify the area with more properties per square metre. It’s mainly spread out wider and wider afield because everyone wants their own plot of land."

New Zealand does not have as many heritages building and, outside of the city centres, most homeowners are not limited by land availability, so people are mainly building outwards.

Powers says many property owners would rather demolish an old home and build brand new or add more rooms to the exiting house if the current dwelling is too small.

The most common use of basements is for carparks in commercial spaces because they do not require the same moisture control as the living space and are easier to maintain, he adds.

Refresh Renovations specialist Kim Reiche says there's no demand for basement renovations as the costs are too high and due diligence is complex.

New Zealand building regulations require a basement to have a 2.4m ceiling and waterproofing to become a liveable space.

Reiche says that while each project will vary in price, a basement build can cost as much as $500,000 depending on the construction and location of the house and the scale of the project. The most feasible way to add living space in a basement in New Zealand is to convert a lower ground garage into a room, Reiche says. She points to a recent plan to convert a garage into a bedroom where the 2.4m ceiling ticked the box but the floor needed a damp proof course to comply with a consent. "It was going to cost [the client] $300,000 for a garage conversion because the drains under the floor would also have to be lifted to the new level,” she explained. However, in homes built in 1970s, 1980s and even 1990s, that don't have a damp proof course installed and often have only a two-metre-high ceiling, the cost of complying and consents is even harder. Reiche warns homeowners not to attempt an informal conversion without proper planning and sign off: “There's no value to your house if you can't get a consent. When you're borrowing money from the bank you can’t get a loan for unconsented projects." In the cities like Auckland, basement conversions are more likely to involve lifting a villa to add garaging or living spaces, according to House Lifters' Rod and Stuart Moore. The process is not fast, as the company’s website points out, as a basement project requires engineering, geotechnical and soil reports and may also require extra foundation work, re-piling and ground stabilisation before earthworks can begin.