For most New Zealanders, property development means tearing down an old home and building a new house on the site. New Zealand offers a wide range of housing choices, including relocatable houses. The most common types of relocatable housing in New Zealand are older, timber-framed houses. These can range from villas or bungalows dating back to early 1900s all the way up to modern weatherboard and state homes constructed between 1950s-1970s.
It is possible to use relocatable housing as an innovative way of developing a property into a residential or investment property. New Zealand has been moving houses since the sixties. Haines House Haulage formed in 1973 has provided a training ground for local moving companies for the past 54 years, with more than 10,000 moves experience.
The trucks are moved from place to place. A new transportable house is built in a separate location before being delivered to its final destination, which may be up to 200 km away.
New Zealand has lots of choices for removal or relocatable homes, and in all sorts of conditions that would be ideal to move. Moving a house is more affordable than buying a brand-new property, especially with the rising cost of construction.
Know what to do if your goal is to construct a moveable home in conjunction with your next building project.
New Zealand offers a wide range of housing choices, including relocatable houses. The most common types of relocatable housing in New Zealand are the older, timber-framed houses. These can range from villas or bungalows dating back to early 1900s all the way up to modern weatherboard and state homes constructed between 1950s-1970s.
Older wooden houses have strong foundations. These sturdy wooden structures are constructed of indigenous wood and can endure extreme conditions. They can be disassembled and assembled more easily with the timber-cladding.
While bricks and tile home are usually demolished. The main advantages to working with a removal or relocatable house is the cost. This is a huge benefit because in recent years construction costs have increased by 30-40%. This makes it more economical to build relocatable housing than constructing new on a slab.
Let’s do some math.
A 100m2 home with three bedrooms would cost $420,000 or about $4,200 per square metre. Moving a home can be broken down into two main components: the cost to move and that of the house. Prices for homes can range from zero dollars in the case of sellers who just want to get rid of an old property, to upwards to $400,000. The cost of shifting a three-bedroom home with 100m2 onto foundations in one piece would roughly be $50-70K.
The total cost of a house and the relocation expenses can range from $50k to $400k for a large or more difficult home.
Even factoring in an additional $100,000 or so for site works and improvements–connecting wastewater and electricity lines, adding entranceways, decks and general renovations–you are still well under that $420,000 figure.
The character of older houses is what we all admire. From Ponsonby Villa style houses, with their elaborate period details like the fret work, high ceilings and stained glass windows and doors. Then there are the old state houses that have stunning native hardwood floors. Both features are rarely seen in new construction and many buyers value them.
Developers increasingly turn to relocatable for an affordable alternative as high construction costs are making development projects unviable.
Many relocatable properties are older and may have elements that do not conform to modern building code. In lieu of requesting that the home be brought up-to date, many councils issue certificates of conformity if the report of an accredited inspector confirms it was built to the standards of the original construction. I second hand building report is often requested from the council as part of the Building Consent Application.
To be approved, all additions to the house, including decks and entranceways and changes to the house need to be included in the building consent and comply with building codes.
From Point Chevalier to Paihia
Are they easy to finance?
The short answer is not quite so easy. It may be more difficult to finance relocatable projects than other types of construction. The property will be secured by the lender until it has been finished and has Code of Compliance.
It is a very different project from your standard building. In normal circumstances, funds are released by lenders as property values increase over time. With this method of construction, money is released at various stages of progress ie:
• Deposit to secure the building, has occurred on the site. (50%)
• Once the house is moved to site (25%)
• When the house is lowered onto it finished foundations (25%)
It is usually beneficial to consult with a reliable and knowledgeable adviser when doing a Removal home or relocating a house. These professionals can negotiate more favourable terms with the banks and guide you through what you will need to provide.
Haines House Haulage also provides Insurance whilst this process take place. This is very important to check because many house movers do have insurance. Always ask for the certificates of proof.
Developers and investors are often considered commercial lenders. They have a variety of options, both from non-banking institutions and the banks. It may be more difficult to find funding if you are planning to reside on your property. The best place to start is with a major bank. You may need to lend against the property at the highest LVR that the bank will allow and then use you cash to buy the house.
If you want to secure financing you must show that the total value after adding in any equity and value added by relocations or renovations falls under the LVR of a particular lender (which will vary depending on whether or not you are an investor or owner-occupier). This threshold is different depending on if it’s your main residence or a rental property. Many of our clients now use second tier lenders to get the initial funding and then once they have CCC they go back and take a loan from a mainstream bank.
With Interest Rates coming down, maybe now is the time to gain a good lift on the property ladder. If you are interested in looking into Relocatable homes, give Greg from Haines a call, he has be selling houses in this field for over 20 years. greg@hainesgroup.co.nz or 021933000.
