1 00:00:00,120 --> 00:00:03,120 Speaker 1: Interesting this building consense thing that we talked about with 2 00:00:03,160 --> 00:00:06,160 Speaker 1: Andrew Briekley. So these new data points show the townhouse 3 00:00:06,200 --> 00:00:08,960 Speaker 1: and apartment consents in Auckland are up thirty six, six 4 00:00:09,039 --> 00:00:11,119 Speaker 1: hundred and nineteen concents all over the country, which is 5 00:00:11,200 --> 00:00:13,360 Speaker 1: up nine percent in and of itself Auckland though up 6 00:00:13,400 --> 00:00:16,079 Speaker 1: twelve percent. An kit Chalma is the master build a 7 00:00:16,120 --> 00:00:17,880 Speaker 1: CEO and as well as an kit morning to you 8 00:00:18,760 --> 00:00:20,960 Speaker 1: morning make so story last week there's a whole bunch 9 00:00:21,000 --> 00:00:23,080 Speaker 1: of unsold stock in Auckland. Why would you go and 10 00:00:23,120 --> 00:00:25,880 Speaker 1: build a whole bunch more stock when you know that? 11 00:00:26,000 --> 00:00:26,840 Speaker 1: How does this work? 12 00:00:28,040 --> 00:00:30,760 Speaker 2: Well? I think there is some aw supplier risks which 13 00:00:30,800 --> 00:00:34,040 Speaker 2: I think you are indicating NBA seeing some higher vacancy 14 00:00:34,120 --> 00:00:37,000 Speaker 2: rates and softer rent, but we think that's a short 15 00:00:37,040 --> 00:00:39,480 Speaker 2: term challenge. So if you look at the long term 16 00:00:39,520 --> 00:00:44,640 Speaker 2: population forecasts, growth including immigration, tend to concentrate in cities, 17 00:00:44,760 --> 00:00:48,479 Speaker 2: especially in Auckland, and our cities also have real infrastructure 18 00:00:48,560 --> 00:00:51,920 Speaker 2: constraints and a higher density makes better use of what 19 00:00:52,000 --> 00:00:55,200 Speaker 2: we already have. So that is why we think cities 20 00:00:55,240 --> 00:00:57,680 Speaker 2: will continue to see or were medium to long term 21 00:00:57,720 --> 00:01:01,160 Speaker 2: demand for timehouses and apartments and it's better to build, 22 00:01:02,000 --> 00:01:04,840 Speaker 2: you know, before the demand comes, otherwise we end up 23 00:01:04,840 --> 00:01:09,240 Speaker 2: in the same problem where we've got shortages all the time. 24 00:01:09,480 --> 00:01:13,280 Speaker 1: Excellent answer. Is the townhouse slash apartment story really a 25 00:01:13,319 --> 00:01:15,320 Speaker 1: story of urban New Zealand or is it pretty much 26 00:01:15,319 --> 00:01:16,160 Speaker 1: all over the country. 27 00:01:17,240 --> 00:01:20,319 Speaker 2: I think it's really a urban New Zealand and primarily 28 00:01:20,400 --> 00:01:24,400 Speaker 2: driven by affordability and land availability and the fact that 29 00:01:24,480 --> 00:01:27,959 Speaker 2: we have significant infrastructure constraints. So if we start building 30 00:01:27,959 --> 00:01:32,720 Speaker 2: too many apartments and townhouses in outside of urban areas, 31 00:01:32,760 --> 00:01:35,120 Speaker 2: we'll start having all the supply resp But for urban 32 00:01:35,360 --> 00:01:37,520 Speaker 2: New Zealand cities it completely makes sense. 33 00:01:38,240 --> 00:01:41,039 Speaker 1: Is there any nuance and subtlety in the numbers in 34 00:01:41,120 --> 00:01:43,560 Speaker 1: terms of what's being built? I mean we just look 35 00:01:43,600 --> 00:01:45,960 Speaker 1: at numbers, you know, thirty six, six hundred and nineteen, 36 00:01:46,040 --> 00:01:48,280 Speaker 1: but what are they? Are they one bed, two bed, 37 00:01:48,320 --> 00:01:51,120 Speaker 1: three bed upmarket? Down market? I mean there is there 38 00:01:51,120 --> 00:01:52,240 Speaker 1: that sort of story. 39 00:01:51,920 --> 00:01:55,960 Speaker 2: In there a little bit. I think stand alone numbers 40 00:01:55,960 --> 00:01:59,200 Speaker 2: are holding steady, so that's actually showing that people are 41 00:01:59,240 --> 00:02:02,480 Speaker 2: still investing in higher end of the housing market. So 42 00:02:02,560 --> 00:02:07,120 Speaker 2: that's quite important for overall recovery. But townhouses and apartment 43 00:02:07,200 --> 00:02:10,120 Speaker 2: numbers are quite high, so that I think shows that 44 00:02:10,760 --> 00:02:14,280 Speaker 2: affordability and having lower entry pricing it continues to be 45 00:02:14,360 --> 00:02:17,359 Speaker 2: quite important, which means for first home buyers there will 46 00:02:17,360 --> 00:02:20,080 Speaker 2: be good options moving forward. So I think the balance 47 00:02:20,120 --> 00:02:22,520 Speaker 2: has changed a little bit to what we've had historically. 48 00:02:23,360 --> 00:02:25,920 Speaker 2: But if you can manage the higher density better, you know, 49 00:02:25,960 --> 00:02:29,560 Speaker 2: with like open cities have done, with better planning, urban planning, 50 00:02:29,840 --> 00:02:31,960 Speaker 2: this could actually turn out to be a good story 51 00:02:32,000 --> 00:02:33,880 Speaker 2: for us five ten years from now. 52 00:02:33,960 --> 00:02:36,280 Speaker 1: Good When you talk about the cost of I mean, yeah, 53 00:02:36,320 --> 00:02:39,080 Speaker 1: I follow the apartment market quite closely, and the cost 54 00:02:39,080 --> 00:02:42,320 Speaker 1: of building is a problem, and you're running it once 55 00:02:42,360 --> 00:02:44,480 Speaker 1: you get up to ten thousand dollars a square meter, 56 00:02:44,560 --> 00:02:45,920 Speaker 1: and I know that's up there. But if you get 57 00:02:45,919 --> 00:02:48,119 Speaker 1: to ten thousand dollars a square meter, you're looking at 58 00:02:48,360 --> 00:02:52,320 Speaker 1: comparatively speaking expensive apartments and they're tiny. Do people want that? 59 00:02:54,040 --> 00:02:56,840 Speaker 2: Well? It's interesting. So I think what we're finding is 60 00:02:56,840 --> 00:03:00,400 Speaker 2: as people are getting older and they're wanting more free 61 00:03:00,440 --> 00:03:03,040 Speaker 2: time to do things they want to do, there's an 62 00:03:03,080 --> 00:03:07,160 Speaker 2: increased demand for apartments at a higher end, and for 63 00:03:07,280 --> 00:03:10,440 Speaker 2: definitely cities at an entry level, there will always be 64 00:03:10,720 --> 00:03:14,079 Speaker 2: need for a first from buyers to get into apartments 65 00:03:14,360 --> 00:03:16,760 Speaker 2: so I think the point is, are we looking at 66 00:03:16,800 --> 00:03:20,840 Speaker 2: these markets and designing these townhouses and apartments to meet 67 00:03:20,880 --> 00:03:24,079 Speaker 2: those needs? And if you do that, apartments will meet 68 00:03:24,120 --> 00:03:27,040 Speaker 2: the needs of the market. If you just start bombarding 69 00:03:27,040 --> 00:03:30,760 Speaker 2: the market with apartments without really understanding those two market segments, 70 00:03:31,000 --> 00:03:34,560 Speaker 2: then we could have an oversupply because people don't want 71 00:03:34,560 --> 00:03:36,960 Speaker 2: to buy those those buildings we are building. 72 00:03:36,960 --> 00:03:39,280 Speaker 1: Right and so well, then might in kit Chiama, who's 73 00:03:39,320 --> 00:03:40,640 Speaker 1: the Master Builders CEO. 74 00:03:41,400 --> 00:03:44,280 Speaker 2: For more from the Mic Asking Breakfast, listen live to 75 00:03:44,440 --> 00:03:45,000 Speaker 2: news talks. 76 00:03:45,000 --> 00:03:48,200 Speaker 1: It'd be from six am weekdays, or follow the podcast 77 00:03:48,240 --> 00:03:49,040 Speaker 1: on iHeartRadio.