In a country where KiwiBuild has attempted to resolve our housing crisis, new data has emerged ranking the busiest businesses in the sector, getting on with the job of creating more roofs over our heads. The largest group of house builders have been ranked in order of new homes completed annually, the total combined dollar value of those homes, the average square metres of each home and the average value of the homes.
While pressure is building on Housing Minister Phil Twyford amid new detail of the scale of the failure of the Government's flagship KiwiBuild policy, the private sector is busy throughout New Zealand creating new residential stock. The annual KiwiBuild conference is in Auckland on Monday and next Sunday, the programme reaches its first-anniversary milestone.
Here, we reveal the details of the 10 busiest builders' workload although the survey reveals data about hundreds of businesses.
Franchised Albany-headquartered G.J. Gardner is New Zealand's largest residential builder, completing more than double the output of its closest rivals and creating more than half a billion dollars of new housing stock in one year, according to a new national survey.
BCI New Zealand's latest data for the year to April showed G.J. franchisees completed 1311 homes nationally, outstripping Christchurch-headquartered Mike Greer Homes' 646 residences and Tauranga-headquartered Classic Builders' 612.
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The 1311 homes built annually by G.J. Gardner franchisees had an average value of $394,000 each, resulting in a $517m boost of new homes to an under-supplied market, BCI's data showed. Homes were on average 200sq m.
David Whitburn, a developer, ex-lawyer and Auckland Property Investors Association immediate past president, said gross sector margins averaged around 10 to 14 per cent, differing between businesses and geographic areas.
"From these gross margins for group housing companies, they will have office costs, loan interest costs and other expenses amounting to 6 to 8 per cent often. This can result in profit margins of as low as 2 per cent, but in the 2 to 8 per cent range," he said, estimating G.J. Gardner's net profit margin could be $20m or less.
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Grant Porteous of Deacon Holdings which owns the master franchise for G.J. Gardner, said the business had 31 franchised offices and had been New Zealand's most-trusted home builder for two decades but in commenting on the high numbers achieved said: "Humility is an important part of our culture so we don't really talk numbers as it can be seen as blowing our own trumpet or possibly in some way, unjustly disparaging about other builders."
On revenue, Porteous said: "I am not prepared to share our financial information for our group. However, the guesstimate is inaccurate.
"For our financial year to March 2019, we built 1467 homes. It's not our biggest year. The prior year, we built 1580. And we've built more than $600m in build value - no land included - in the past," Porteous said.
On the firm's ongoing success and industry dominance, Porteous said: "We believe this comes down to our business philosophy from day one. We never set out to be New Zealand's biggest volume builder. Our success is a result of our culture and our people and along with good old-fashioned values and a lot of hard work.
"We've got where we've got by working bloody hard as do our team," he said. Some franchisees had also made a significant investment in supporting KiwiBuild initiatives.
Whitburn said G.J. Gardner had efficient systems and "real presence" with so many offices spread around New Zealand.
"Critical mass gives them benefits," Whitburn said, although he did express surprise that GJ Gardener completed 666 more homes than Mike Greer Homes: "I would have thought the gap would have been a lot closer."
BCI said second-biggest NZ group house builder was Mike Greer Homes, completing 645 residences worth an average $281,000/each and an average 147sq m floor area, creating $181m of new housing stock in the April year.
Greer said his non-franchised firm's scope of work was bigger than that but due to how the data was collected, it masked the real scope of his business.
"Anything that we don't design or aren't already the nominated builder on the building consent isn't captured against us, which is the majority of our work - tenders, retirement villages, etc. I don't have franchises. I own my own branches," Greer said.
"Currently we have 600 units [residences] under construction with a 1000-unit pipeline," Greer said.
Whitburn said Mike Greer had a big presence with KiwiBuild.
In February, Twyford announced a new partnership between the Government and Mike Greer to build more than 104 KiwiBuild homes in Huapai, Whenuapai, Pukekohe, Kaiapoi, Rolleston, Pegasus, Woodend, Rangiora, Halswell, Marshland and Spreydon, due to be finished before mid-2020, a mix of two and three-bedroom, standalone and terraces from $360,000 to $650,000.
Greer said his business had "settled approximately six KiwiBuilds. We have 60 under construction - 38 KiwiBuild contracts in our 1000-pipeline, not started."
Third-ranked Classic Builders erected 612 residences worth $196m in the April year, BCI said. Those had an average value of $321,000/each and an average size of 160sq m.
Like Mike Greer, Classic has is busy on KiwiBuild and in May was reported as being inundated with inquiries for eight Omokoroa places. A Classic director, Peter Cooney, said demand was high because Tauranga was attractive and people were still moving there. He praised the collaboration between Classic, the Western Bay of Plenty District Council and Government through KiwiBuild. that enabled his firm to fast-track stages of development and allowed Classic to gear itself up to go a lot quicker, Cooney said.
But he has also been outspoken about his home area, Tauranga, and its lack of land supply. He said this year it was in "dire straits, regionally, I believe we will be the worst hit area in New Zealand over the next four to six months. I know that from the numbers from around the country."
Whitburn said Classic was particularly strong in Hamilton, Rotorua, Tauranga and at Hobsonville Point.
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Cooney said the Tauranga City Council was too risk-averse and spent too much time and money on consultation "and people have nimby syndrome".
Fletcher Residential is fourth-ranked, building 461 residences worth an average $286,000/each and creating $132m of new housing stock in the April year, BCI numbers showed.
Fletcher Building said that in the year to June, 2018, residential and development produced gross revenue of $575m, up 37 per cent on the previous $420m.
Fletcher said in the year to June 30, 2018 it sold 714 dwellings in New Zealand, up from just 499 the previous year. Operating earnings for the residential group within Fletcher were up 12 per cent at $85 million.
Previous targets of more than 1000 new Fletcher residences annually have been cited before.
Fletcher Residential is either building or planning homes at Beachlands, Hobsonville Point, Karaka, Kowhai Ridge, Ormiston, Red Beach, Stonefields, Swanson, Three Kings, Totara Heights, Waiata Shores in Manukau, Whenuapai and in Christchurch.
Signature Homes was fifth-ranked for building 343 homes in the April year, worth a total $138m, an average $402,000 value each and 176sq m, followed by Jennian with 326 homes worth a total $133m, an average $410,000 each and 174sq m.
Two big central-Auckland apartment builders came sixth and seventh. Their ranking is a measure of the high number of new towers being built in the city: Icon of Australia which arrived to build the 57-level Pacifica rising on Commerce St for Hengyi Pacific and the New Zealand-owned Kalmar Construction which has been busy on Sugartree near Spaghetti Junction.
Golden Homes is ninth, building 261 residences for an average $355,000, completing $355m worth of work. CMP and Stonewood are ranked 10th equally, both building 239 residences in the April year, BCI says.
On June 21, Twyford said: "Housing NZ currently has about 160 active construction sites around Auckland. The Government and the community housing sector are well on track to provide 1600 new public housing places a year funded in last year's Budget."
