Boost for tim­ber con­struc­tion

The Press - - Property -

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part­ments in a show­case five-storey wooden build­ing at Clear­wa­ter in Christchurch will be priced at up to $2.5 mil­lion.

The apart­ment build­ing is to be con­structed of engi­neered ‘‘mass’’ tim­ber to demon­strate how th­ese build­ing ma­te­ri­als can best be used in mid-rise build­ings as part of a gov­ern­ment ini­tia­tive to boost the use of tim­ber in con­struc­tion.

Three of the apart­ments have al­ready been sold off the plan at prices be­tween $1.1m and 1.8m, the de­vel­oper Clear­wa­ter Quays Apart­ments Ltd, part of the Red Stag group, said.

Th­ese prices are noth­ing un­usual for Clear­wa­ter, where lux­ury lake­side prop­er­ties can eas­ily fetch more than $2m.

Red Stag has part­nered with the Min­istry of Pri­mary In­dus­tries to de­liver ‘‘Mid-rise Wood Con­struc­tion’’, a four-year

$5m Pri­mary Growth Part­ner­ship (GPG) pro­gramme.

The apart­ment build­ing project is part of that.

Red Stag chief ex­ec­u­tive Marty Verry said con­struc­tion would start in the sec­ond quar­ter of next year and the project would be com­pleted in the first quar­ter of

2020. Nay­lor Love has been en­gaged to con­struct the build­ing.

Mass tim­ber was the term used to de­scribe large glue lam­i­nated beams and cross lam­i­nated tim­ber (CLT) pan­els.

They made for a light­weight, strong and fast build­ing sys­tem, us­ing com­po­nents that were pre­ci­sion engi­neered at fac­to­ries off-site.

He said the eight apart­ments ranged from 130 square me­tres to


The first three sold were two smaller ones at 130sqm which in­cluded a dou­ble garage and the other was larger at 230sqm.

The re­main­ing apart­ments, in­clud­ing a pen­t­house, would be priced be­tween $1.25m and $2.5m.

Verry said New Zealand was catch­ing up with the rest of the world in us­ing engi­neered tim­bers.

‘‘Glob­ally, there has been rapid growth in the use of engi­neered tim­bers such as cross-lam­i­nated tim­ber and glu­lam for con­struc­tion.

How­ever, New Zealand is be­hind other coun­tries such as Aus­tralia, Aus­tria, Canada, Eng­land, and the United States in adopt­ing engi­neered and pan­elised tim­ber for con­struc­tion.

‘‘The whole project is a show case/case study on best prac­tice and how to build with var­i­ous tim­ber so­lu­tions to achieve cost sav­ings and the speed sav­ing avail­able from con­struc­tion in tim­ber,’’ Verry said.

Red Stag would cover the con­struc­tion costs. MPI’s in­vest­ment would cover de­sign, col­lat­ing and shar­ing in­for­ma­tion.

Verry said it would prob­a­bly source the CLT from Nel­son’s Xlam plant. Red Stag was still plan­ning its CLT plant and it would not be ready in time to sup­ply the apart­ment project.

Red Stag had not de­cided yet where to source the large glu­lam columns and beams.

Verry said it was hop­ing to use Red Stag tim­ber for pre­fab­ri­cated braced fram­ing and for that to be made at the Con­ci­sion fac­tory in Can­ter­bury.

The pro­gramme in­cluded Red Stag de­vel­op­ing a sec­ond mass engi­neered tim­ber build­ing in the North Is­land, likely to be a com­mer­cial build­ing.

Steve Penno, di­rec­tor in­vest­ment pro­grammes at MPI, said engi­neered tim­ber pro­vided the op­por­tu­nity for New Zealand to add sig­nif­i­cant value to its home-grown tim­ber.

The Mid-rise Wood Con­struc­tion pro­gramme aimed to sub­stan­tially in­crease de­mand for engi­neered wood prod­ucts in build­ings, which would have flowon ben­e­fits across the sup­ply chain.

‘‘This will cre­ate new re­gional jobs and re­newed in­vest­ment in forestry, pro­cess­ing, man­u­fac­tur­ing, con­struc­tion, and pre­fab­ri­ca­tion. Achiev­ing the pro­gramme’s goals will sig­nif­i­cantly ad­vance New Zealand’s engi­neered tim­ber in­dus­try,’’ Penno said.

If suc­cess­ful, the pro­gramme ex­pected to de­liver eco­nomic ben­e­fits of $115m by 2023, driven by a 10 per cent lift by 2023 in wood’s share of the multi-unit res­i­den­tial and non-res­i­den­tial con­struc­tion mar­ket.

New Zealan­ders are still mak­ing plenty of money when they sell their homes, ac­cord­ing to win­ter fig­ures from prop­erty data re­searchers CoreLogic

The com­pany’s lat­est ‘‘pain and gain’’ re­port shows that $3 bil­lion in gross profit was made from house sales dur­ing the July to Septem­ber quar­ter, and that 96 per cent of all prop­er­ties made a gain.

The me­dian gain was of

$180,000 per prop­erty. Only a few sales, just 4.2 per cent, made a loss over the same pe­riod, which to­talled $29.9 mil­lion or about

$20,000 a prop­erty. CoreLogic’s head of re­search Nick Goodall said while many peo­ple would plunge the eq­uity they made back into an­other prop­erty, the prop­erty mar­ket was still look­ing very solid.

‘‘The de­gree of pain in New Zealand’s hous­ing mar­ket has been hov­er­ing around very low lev­els of 4 per cent each quar­ter for about two years.’’

Prop­erty val­ues con­tin­ued to grow across most parts of the coun­try, ex­cept for Auck­land and Christchurch, where they were flat­ten­ing, and show that ‘‘few peo­ple want to push through a quick sale for a low price’’.

Since Septem­ber, the prop­erty mar­ket has seen a cou­ple of ma­jor changes, in­clud­ing the Re­serve Bank’s de­ci­sion to loosen the rules on loan to value ra­tios.

An­other is the en­act­ment in Oc­to­ber of the Over­seas In­vest­ment Amend­ment Bill, which cur­tails the num­ber of homes that over­seas in­vestors can buy here.

But Novem­ber sales fig­ures from the Real Es­tate In­sti­tute sug­gest that the usual spring bounce in house sales had oc­curred. Oc­to­ber’s na­tional me­dian house price rose 0.5 per cent on the pre­vi­ous month to

$562,000, which was 6 per cent higher year-on-year.

Tellingly, the pro­por­tion of in­vestors mak­ing a profit on re­sale was al­most as strong as owner-oc­cu­piers at 95.4 per cent, which per­haps ex­plained why there had not been an ex­o­dus of in­vestors from the mar­ket. They were sit­ting on high val­ues and yields based on much lower pur­chase prices, Goodall said.

If there was any sign of own­ers bail­ing out, Goodall said it was more likely in the apart­ment mar­ket. About 90 per cent of apart­ments sold at a price above the orig­i­nal pur­chase price, mean­ing 9.9 per cent were sold at a loss. That rep­re­sented a big­ger pro­por­tion of losses than house sales and a big­ger me­dian loss – about $27,500.

‘‘This shows that any mar­ket fa­tigue is more of a fac­tor in the apart­ment seg­ment, per­haps where buy­ers’ ap­proach is more fi­nan­cially-minded and they are pre­pared to exit as soon as the sums don’t add up any more,’’ Goodall said.

In the long-term, the pro­por­tion of loss-mak­ing apart­ment sales had shrunk size­ably, from lev­els of 45 per cent in 2000 and 53 per cent in 2008, ‘‘so the cur­rent lev­els aren’t ac­tu­ally too bad’’.

Dunedin had the least amount of losses, with only 1 per cent of house sales tak­ing a bath.

Christchurch’s fig­ures re­main weaker, with 13.4 per cent of re­sales mak­ing a loss, but much of that was be­cause of the num­ber of ‘‘as is, where is’’ sales af­ter the 2011 earth­quake.

An il­lus­tra­tion of the five-storey apart­ment build­ing to be de­vel­oped at Clear­wa­ter in Christchurch to show­case mid-rise build­ings us­ing New Zealand-engi­neered and pan­elised tim­ber.

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