Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
OFFICIAL PUBLICATION OF THE BUILDING HUB www.buildinghub.co.nz
www.bobforbuilders.co.nz
THE BUSINESS OF BUILDING (FOR BUILDERS)
1E D I T I O N
20 1 8B I - A N N U A L
Like us on Facebook key word buildingguide
Follow us on Twitter
Chemicals on-siiiiiiiiiiiittttttttttttttttteNasty buggers ouuuuuuuuut to get you
Word of Moutuutttth MarketingIs it really stiltill the case?
DisputessThey’re inevitanevitable, so what do youu do?
Alan’s RantThe slack industrtry approach to conssumer education
Chemicals on-siteChemicals on-siteNasty buggers out to get you
Word of Mouth MarketingWord of Mouth MarketingIs it really still the case?
DisputesDisputesThey’re inevitable, so what do you do?
Alan’s RantAlan’s RantThe slack industry approach to consumer education
KiwiBuild – what’s in it for you? (and why ((((annnnddddd whwe think you should support it)uld sssssssssupporrrrtttttt iiiit)
yKiwiBuild – what’s KiwiBuild – what’s in it for you?in it for you? (and why we think you should support it)
Mastercraft Kitchens are a preferred supplier to many
choose Mastercraft to produce and install their
1744
BoB
MA
ST0
1 ©
Mas
terc
raft
Ser
vice
s Li
mite
d
See us online at www.mastercraft.co.nz or call 0800 67 67 67
Visit: www.mastercraft.co.nz/kitchens/bob
Looking for ideas?
ISSUE 1 :18 THE BUSINESS OF BUILDING 1
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Get your favourite Resene colours for FREE! Simply present this voucher at any Resene owned ColorShop & get two Resene 60-80ml testpots for FREE.
Offer valid until 31 December 2018 at any Resene owned ColorShop.Not valid with any other offer. Limit of one coupon per customer.
WELCOME TO THE FIRST 2018 EDITION OF BoB
2018 IS GOING TO BE A YEAR THAT…
But what about Australia, 42 degrees in Sydney and
golf ball size hail stones in Melbourne on the same
day, but I hear you muttering "who cares", as you have
more important issues on your mind.
So you survived Christmas and are planning for 2018
with the new government laying down the gauntlet to
the residential construction sector to build build build
houses. More information will be released encouraging
you to get involved and be creative, but the focus will
always be on speed and affordability.
In this edition we have identifi ed the pitfalls that have
to be resolved in the availability of land, materials and
the necessary skills needed to meet this massive infl ux
of building projects. I doubt the housing industry will
be the same as in previous years or ever again with
the expectation of building all those extra houses to
meet the government's 10 years’ targets. Be alert
to those outside our industry who will be watching
and responding to opportunities as they see fi t.
Unfortunately there will always be the cowboys and
charlatans in our industry, so speak up if you see things
that are not right as we need to safeguard the public
and keep our image clean.
Water water everywhere but not a drop to…well in some
areas maybe, but what a variance we have had weather wise
with no real understanding of what might come next.
Alan Muxlow Quantity Surveyor
With this increase in
work, you may fi nd
materials harder to
source, lose staff who respond to other employment
opportunities or have to adapt to new products and
technology to keep up with the play. With the speed
of construction being a critical factor in all future
residential building, prefabrication alternatives will
become a major factor that cannot be overlooked.
All this requires you to have systems and processes
in place to run your business effi ciently and be ready
to cope with challenges. Note I have called these
challenges, not problems or diffi culties, as resolving
issues is a learning process in itself which makes you
better prepared for the future. Other articles in this
edition give you insights into running your business,
roles of different parties, dispute processes and many
more ways to improve or refocus your business.
I hope you have the opportunity to participate in the
government’s focus to improve the social housing
needs of our society and make NZ a better place to
live, a win win situation for everybody.
THE BUSINESS OF BUILDING ISSUE 1 :182
CONTENTS
LBP SKILLS MAINTENANCE RECORD OF
ACTIVITY
hours spent reading BoB 2018 | 1
Tic
k a
s re
ad
LATEST HINTS AND TIPS 5
NEWS 6Noise on a building site *
Building warranty insurance *
Building Hub *
Dodging dangerous chemicals on-site *
Builders building well; could do better *
New online tool launched *
COVER ARTICLE 16Where there’s a will there’s a way: Kiwibuild *
FEATURES 20Strong growth forecast for building industry bucks history *
The myths of ‘word of mouth’ marketing for builders *
Disputes will happen – here’s how to deal with them *
The technology of energy effi ciency *
No one tells you… *
Demolition (and construction) by robots *
ALAN'S RANT 38
The Business of Building is published by Aim High Publishing Limited.
The contents of The Business of Building are copyright and may not be
reproduced in any form without the written consent of the publisher.
The Business of Building and Aim High Publishing Limited disclaim
responsibility for any statements made by advertisers or appearing in
articles. Printed by Image Centre Group.
Websites: www.bobforbuilders.co.nz
www.buildingguide.co.nz
Email: [email protected]
Phone: 09 360 8885
Fax: 09 360 8887
PO Box 44412, Pt Chevalier, Auckland 1246
Publisher: Mark Graham
Editor: Alan Muxlow
Production Manager: Tracey Sumich
Design: [email protected] points claimed:
(1 hour = 1 point)
ISSN 2230-5459
ISSUE 1 :18 THE BUSINESS OF BUILDING 3
For Builders Who Want To Be Better www.bobforbuilders.co.nz
THE BUSINESS OF BUILDING ISSUE 1 :184
The very latest interior trends are in.
We’re saying goodbye to the mono-chromatic
and washed out neutral looks, and are seeing a
movement towards earthier tones and a
hand-crafted natural look and feel. Our in store
Kitchen Designers have everything on-hand
to help you create a kitchen that reflects
these latest trends, so come in and get
started on your dream kitchen today.
ON TREND ON BUDGET KITCHENS
Pop in and check out our kitchen showrooms, and get started on your dream kitchen today.
G ET STAR TE D N OWmitre10.co.nz/kitchens
ISSUE 1 :18 THE BUSINESS OF BUILDING 5
For Builders Who Want To Be Better www.bobforbuilders.co.nz
LATEST HINTS AND TIPSTOP 6 TIPS FOR GOOD TERMS OF TRADEIt is mandatory to have written terms of trade for all building projects valued at $30,000 or more. Even where the value of a project falls under this threshold, we recommend having written terms of trade for ALL building work.
All good Terms of Trade should include the following
6 matters:
1. Who are you contracting with? If parties are not correctly recorded you may not be able to enforce the contract.
2. What is the scope of the building work? Clearly describe the nature of the work required and being provided. Where the building work has a value of over $30,000 you are required to be very specifi c.
3. How will the work be carried out? Describe what will be done, and clearly describe how it will be done.
4. How much will the work cost? This may be an agreed quote or estimate, or simply a method for determining cost. Whatever the arrangement, make sure it’s recorded in your contract.
5. When will you be paid? Be clear about when payment is due in your contract – do not rely on terms of an invoice.
6. Your agreement is signed and dated by all parties. Mandatory where the work is valued at more than $30,000 but good practice for any contract.
The Building Hub has easy to use contracts free on our website for members. It also makes it easier for us to help if you end up in a dispute if you are using our contracts.
WITHHOLDING TAX FOR CONTRACTORSDo you employ contractors? If you do and they are
employed as labour only workers you need to be taking
out withholding tax from their payments (referred to as
schedular payments).
The standard rate is $20%. However, if their hourly rate is quite
low, we recommend your contractors use our online calculator
to determine a more appropriate figure. This requires your
contractors to estimate their annual expenses.
When assuming annual expenses of $14,000, you will need
to be receiving $105,000 a year in schedular payments to be
paying a tax rate of 20%. If you are getting paid $25ph for a
40 hour week for 45 weeks a year (4 weeks holiday, 2 weeks
public holidays, 1 week sick) then your suggested tax rate is
actually lower than the minimum at 9.9% so it would be 10% (the
minimum).
If you are a contractors and work for other building companies,
you need to make sure you understand your expenses when
accepting work and actual hours you will be paid. To get a real
idea of your hourly rate you will need to take the income you will
receive over the course of a year, subtract ALL work expenses and
then divide that by 2080 to equate the value to a person on salary.
THE BUILDING HUB APP Not long to go now and the Building Hub app will be ready!
This is just the fi rst phase with some easy ways to get your paperwork nailed. We keep coming up with cooler ways to stop you having to do admin.
An example; you want to load a worker, if they are licensed, we already have many of their details, so all you have to do is put in their BP number
and the details we have magically appear!
What if a builder's training details etc. travels with them? You employ a builder, all their training details loaded by their previous employer travels
with them so you don't have to fi ll it all in again. Why bother about training details? Because it is important for your health and safety procedures.
It's all connected. That's where we keep seeing opportunities to make this even easier. If there is anything we can fi ll in for you, we are doing it.
Faster, easier, smarter. That's what the app is all about.
CHARGE OUT RATES - GET IT RIGHTJust a reminder to make sure your charge out rates are
where they should be:
If you set your rates too high you could lose work, if you set
them too low you could go out of business. Here are three tips
to remember when re-evaluating your charge out rates.
1. Calculate ALL your expenses
When you calculate your expenses make sure you include EVERYTHING you do and spend on the business. Include the hours you spend quoting, chasing debt, site visits to discuss potential work, and don't forget to include the time you spend fi ling forms for a CCC. This one is often overlooked.
2. Have an accurate number of chargeable hours
Once you take off annual leave, public holidays, sick leave, gaps between jobs, rain days, delays out of your control etc. you will fi nd that there is often only 40 weeks or 200 work days a year. If you work more than 5 days a week this should be at your benefi t and be above the hourly rate you calculate, not part of it. If you work more than 8 hours a day the same thing applies
3. Your risks and liabilities
We all know that being a builder carries substantial risk and liabilities. This is important to remember when you are calculating your charge out rates. Building is a very physically demanding job which leads to munted knees, fi ngers, shoulders etc. This needs to be compensated for in your income. Same with the liabilities.
It is your most important business decision, getting your charge out rate right. It will make the difference between feeling good about what you have achieved and not. And feeling good about what you do is essential to your continued performance on the next job.
TEN STEPS FOR HAZARDOUS SUBSTANCESThe list below may seem daunting: But for many of you there will not be suffi cient quantities or substances to warrant all the actions below.
Focus on keeping a register, assessing the risks of each product,
training all workers on the contents of the Safety Data Sheets,
storing and disposing of containers and waste appropriately,
and supplying the right PPE.
1. Keep an inventory (Register).
2. Use — and share — safety data sheets.
3. Conduct a risk assessment.
4. Inform and train your workers on how to handle
hazardous substances.
5. Prepare for hazardous substances emergencies.
6. Correctly label containers of hazardous substances,
including hazardous waste.
7. Install warning signs in appropriate places for workers
and visitors.
8. Make sure storage areas and containers are safe.
9. Take care with hazardous waste.
10. Provide suitable protective gear and equipment.
THE BUSINESS OF BUILDING ISSUE 1 :186
NEWS
Many construction and demolition activities are
inherently noisy. However, noise generated during
construction, maintenance and demolition work is
generally of a temporary nature. Provided ongoing
noise does not occur at inconvenient times, the adverse
effects can generally be avoided or mitigated.
NZS 6803:1999 Acoustics – Construction noise allows
for the production of signifi cant noise between the
hours of 7.30am to 6pm during weekdays. The standard
also contains provisions relating to:
• the measurement of noise from construction,
maintenance and demolition work
• the assessment of such noise to determine
whether action is required to control those noise
emissions
• In the event of non-compliance, action can be
taken under the appropriate sections of the
Resource Management Act.
Construction noise: Know the limits
Lmax is the maximum level measured over a time
period, but it is not the same or not as high as an
individual peak level
To help reduce building noise, consider:
• limiting work hours
• selecting quieter equipment or use alternatives
• carrying out work as far away as possible from
neighbours and away from sensitive areas such as
bedroom windows
• regularly servicing equipment – lack of
maintenance can cause higher noise levels
• erecting a solid fence or barrier
• installing an acoustic enclosure for fixed
equipment such as compressors or vacuum
equipment
• modifying equipment – discuss this option with
the manufacturer or installer.
NOISE ON A BUILDING SITEBy Mark Graham
L10 is the noise level exceeded for 10% of the time of the
measurement period. For example, a noise limit of L10
75 dB(A) means that, over a period of 1 hour, the noise
from construction activities can only exceed 75 dB(A)
for a total of 6 minutes or 1 minute over a period of 10
minutes.
L95 is the level exceeded for 95% of the time
and represents the background level without any
construction noise present.
If noisy work is planned, such as jack hammering,
concrete cutting and pouring, discuss this with nearby
residents beforehand. A sign on-site or distribution of
leafl ets explaining the hours and duration of operation
may help prevent complaints.
Reprinted with permission from BRANZ
Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.
www.buildingguide.co.nz | www.designguide.co.nz
NZS 6803:1999 sets out recommended upper limits in dB(A) for construction work noise in residential areas:
Weekdays Saturdays Sundays/Public Holidays
L10 L95 Lmax L10 L95 Lmax L10 L95 Lmax
6:30–7:30pm 60 45 70 . . . . . .
7:30–6:00pm 75 60 90 75 60 90 . . .
6:00–8:00pm 70 55 85 . . . . . .
8:00pm–6:30am . . . . . . . . .
ISSUE 1 :18 THE BUSINESS OF BUILDING 7
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Inspired Architecture Resene Construction Systems provides solutions to New Zealand’s premier residential and commercial projects.From our cavity based ‘rainscreen’ plaster facade’s, and hydrophobic INTEGRA AAC flooring Systems, through to our hand applied interior finishing systems, we have developed a range of solutions that incorporate the latest technology & materials to provide durable and aesthetic results that inspire.
All system installations are warranted and installed by our network of professional LBP registered contractors to strict specifications providing surety of performance to your project.
Cymon Allfrey Architects
Rockcote INTEGRA
rainscreen facade
TM
How would you like a warranty that doesn’t seek any monies from you in the event of major problems?
Under the Building Act, builders and developers are liable for defects for up to 10 years. The Stamford warranty ensures that if a claim is payable within years 3-10 of the policy term, we will not seek to recover anything from the builder, even if his defective work caused the problem. This greatly improves your fi nancial security.
Stamford Insurance has a range of Building Warranty Insurance policies to provide 10 years’ protection against major structural defects, including weather tightness issues, for construction projects in New Zealand..
All Types of Projects can be insured:
• Individual homes
• Townhouses, duplex and multi-unit complexes
• Apartment buildings
• Commercial and mixed-use developments
• Renovation, conversion and re-clad projects
Advantages for the Builder:
1. Most other guarantees only cover the homeowner for defects which are the builder’s fault - the Stamford Warranty goes further by covering you too.
2. The Stamford Warranty is superior for your customers and far better for you as the builder/developer.
3. The Stamford Warranty covers all defects with no proof of liability required.
SO WHO ARE STAMFORD INSURANCE?They are insurance professionals and Coverholders at Lloyd’s of London.
Lloyd’s is the the world’s leading specialist Insurer and carries an ‘A’ rating from all the major rating agencies – that means Stamford’s policies are underwritten by a market-leading insurer with an undoubted reputation stretching back over 300 years.
WHAT DOES THE POLICY COVER?The Stamford 10 Year Warranty provides the widest cover in NZ.
Finally… a Building Warranty available to ALL builders that does what it says
It covers All Defects in the fi rst 2 years and then Major Structural Defects including Failure of the waterproof envelope for a further 8 years due to:
• Defective design or specifi cation
• Failure of products and materials
• Defective workmanship
And it also covers:
• Loss of Deposit or Failure of the Builder to Complete the build (if required)
• Cost of renting Alternative Accommodation whilst repairs are carried out
• Professional Fees in the event of a claim
Key Benefi ts:
• Provides a fi rst response policy directly to the Owner or the Body Corporate
• Improves the value of the property, market perception and your reputation
• Helps achieve sales faster
• Protects the Developer against defects claims from the date of PC
• Protects the Builder against major defects claims in years 3-10
• The insurers deal with the problem and fi nd the solution – no need for litigation
• Independent management of all claims by loss adjusters
• Transferrable to a New Owner on Sale at any time within 10 years
• Projects of any value can be covered
• No Trade Association involvement or high ongoing annual fees
So if you’re still using a guarantee that doesn’t provide you with all of this, the Stamford Building Warranty is for you.
Stamford Insurance – delivering security and peace of mind
For more information or to make contact go towww.stamfordinsurance.co.nz
NOT INSURED INSURED WITH LLOYDS
NOTIFICATION & INVESTIGATION
Owners must carry out their own investigation, perhaps
employing professional surveyors at their own expense to
determine the cause of the loss.
Insured notifi es a claim and insurers appoint independent
loss adjusters (at their own expense) to investigate the claim
and determine remedial action.
CLAIM & LITIGATION
Owner makes a claim against the party responsible (if they are
still in business). This may involve lengthy negotiation, even
litigation to achieve a result. All the time, the building may continue
to deteriorate. Owners will usually reach a negotiated or legal
settlement for less than the full cost of the works.
If it is a valid claim, the insurers will pay for 100% of the loss,
subject to a small excess. They have every incentive to remedy
the defects quickly as their costs will only increase if there is
any delay in carrying out repairs.
REMEDIATIONThe owner must then execute the works, employing their own
professional team and contractors with all the risks that that involves.
Insurers appoint professional project managers and
builders to undertake repairs.
ALTERNATIVE ACCOMMODATION
Owners must make their own arrangements.The policy pays for up to 26 weeks of comparable
alternative accommodation.
AFTER COMPLETION The owner still has a property without any warranty in place. The building is still covered by Lloyd’s for the balance of the 10 years.
If you were to design the perfect Building Warranty, it would be a genuine, first
response insurance policy which protects your clients against the problems associated
with building defects without having to prove liability – and one which also protects you!
ISSUE 1 :18 THE BUSINESS OF BUILDING 9
For Builders Who Want To Be Better www.bobforbuilders.co.nz
THE BUSINESS OF BUILDING ISSUE 1 :1810
AS OF 1 JANUARY 2015, IT IS MANDATORY TO HAVE WRITTEN BUILDING CONTRACTS FOR PROJECTS WORTH $30,000 OR MORE.The Building Act 2004 (“the Act”)
has been amended to require building
contracts to contain certain minimum
content. You can be fi ned $2,000 if
you don’t comply with some of the
requirements of the Act over and
above doing a project over $30,000
without one at all.
The Building Hub, with Rainey Collins
Lawyers, has developed simple and
easy to use contracts for its members
that include all information required
by the Act. These contracts are free
to use as long as you are a current
fi nancial member of The Building Hub
(If you are not, you will be in breach
of the Building Hub’s copyright and
the terms under which the contracts
can be used).
You should always read and
familiarise yourself with any contract.
If you are in any doubt, you should
seek legal advice. If you do not have
a current lawyer we suggest calling
Rainey Collins (partners of The
Building Hub) on 04 473 6850.
WHY HAVE A CONTRACT?
If the building work you are
undertaking will cost $30,000 or
more, it is mandatory to have a
building contract. If you do not have
a contract in place and the building
work is worth more than $30,000,
the Act sets out the terms of your
contract. The terms set out by the Act
are more advantageous to the client
than the terms under our contracts
(which are more advantageous to the
builder). We recommend a contract
even for smaller jobs – it just makes
everything clear so there is no
misunderstanding.
Contracts are important for clearly
defi ning who is responsible for what,
when things are going to happen,
how things are going to happen, and
at what cost. Contracts also explain
what is to happen when there is a
dispute between the builder and the
client. According to a BRANZ survey,
75% of new builds had call-backs due
to defects, and one in six had disputes
over the fi nal cost. When you include
renovations, the disputes climb to one
in every four builds.
This alone should be a driving
factor for building contractors to
use Building Hub contracts for
everything.
INVOICING THE CLIENT DURING THE JOB
If you are going to be invoicing the
client during the job, you need to
understand how to use Payment
Claims and Payment Schedules.
A Payment Claim is essentially
the invoice. We have a Payment
Claim form that you can use which
is accessible via the Building Hub
resources.
The contracts provide for Payment
Claims to be determined either
on a percentage basis or by work
completed to the date of the Payment
Claim. You need to identify in the
Specifi c Terms of Contract how
you intend to determine payment
claims. If you do not select an option,
the Contract provides a default
position – that Payment Claims will be
determined based on work completed
to the date of the Payment Claim.
You need to identify in the Specifi c
Terms of Contract how many Payment
Claims you expect to make. For
example, if you expect the building
work to begin on 1 February and
be completed by 1 June and you
intended to submit a Payment Claim
on the fi rst of each month, you would
note in the specifi c terms of contract
that you expected to make four
Payment Claims.
The Payment Claim forms give you
space to describe the work you are
claiming payment for as well as any
variations which have been agreed to
and recorded in writing.
When you submit a Payment Claim
to a client, you need to also provide a
blank Payment Schedule for the client
to complete and submit to you if they
dispute the payment claim.
If a client asks for an explanation
of Payment Claims, you could say
something like this…
“A payment claim is basically an
invoice which describes what we are
claiming for at that time. As this is a
large job, you need to make progress
payments as we move through it.
This is done by us providing you with
payment claims on a regular basis,
and you paying them.
If you disagree with, or dispute, a
payment claim, you can respond
with a payment schedule (which we
will supply to you along with each
payment claim). When submitting a
payment schedule, you need to state
what it is you are not happy with,
what portion of the payment claim
you agree to pay and when, and
how you calculated the difference
between what was claimed and what
you are proposing to pay.
If you are satisfi ed with the work
claimed by the payment claim, all you
need to do is pay the claim by the
due date.”
If you have a residential building
project that is likely to cost close
to, or over $30,000 (inc) then you
MUST have a building contract with
the person or business who will be
undertaking the building work. At the
Building Hub we strongly recommend
having a contract for ALL building
work irrespective of the value. The
contract will set out the work to be
done, when and how that work will
be paid and what will happen if either
party default on the contract.
ISSUE 1 :18 THE BUSINESS OF BUILDING 11
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Our range of hand applied organic natural interior finishes compliment and enhance your living environment.
Our range includes;Rockcote EARTHEN natural clay provides a ‘breathing surface’ which assists in controlling internal vapour. It is also 100% recyclable and can be coloured from within Resene’s Whites & Neutrals range.
Milano polished lime based finishes from Italy. This range provides a premium high polish finish for feature walls.
Our range of premium external, cavity based plaster facade systems includes our INTEGRA lightweight concrete, and Graphex Insulated facade systems which are BRANZ weathertight tested and installed only by our network of registered LBP contractors.
Base Render
Fibreglass Reinforcing
Levelling Render.
Sealer
Pre-Coloured Texture *1
Rockcote Armour or Resene X200
Cavity Battens
INTEGRA lightweight concrete flooring - no more squeaky floors.
Our 75mm thick lightweight concrete flooring is the only aquapel infused lightweight concrete on the market today. INTEGRA flooring is a superb choice for all new construction projects providing acoustic, and thermal insulation along with the feel of solid concrete.
Super hydrophobicSteel mesh reinforced Waterproof when cutEasy handling Cost effectiveAll weather installation
All products and systems are warranted and installed by the network of Resene Construction Systems registered LBP plastering professionals to strict specifications providing surety of performance to your project.
www.reseneconstruction.co.nz 0800 50 70 40
THE BUSINESS OF BUILDING ISSUE 1 :1812
Symptoms of silicosis include:
• shortness of breath following
physical exertion
• severe cough
• fatigue
• loss of appetite
• chest pains
• fever
• cyanosis (bluish skin)
0800 82 77 44
❱❱❱ FAST RESPONSE CALL BEFORE 10AM AND WE
DELIVER THE SAME DAY❱❱❱ FREE DELIVERY
WITHIN AUCKLAND❱❱❱ GUARANTEED
WATERPROOF, CLEAN, QUALITY TARPS EVERY TIME
❱❱❱ FREE PICK UP
MMMaanufaaccttuurerss oof QQuuaalityyy,, RReliabbblle TTaarrpss
Manufacturers of Quality, Reliable Tarps
Silicosis and symptoms
Silicosis is a very unpleasant disease caused by
excessive inhalation of fi ne dust. It is more familiar
to miners than to builders, but it presents a real
threat on the building site. Smoking makes it
worse, and there is no cure: in acute form silicosis
sufferers may die within a year, after their lungs
have ceased working.
Silica is a component of concrete, brick, stone, sand
and clay. Linea Board packaging comes with plenty of
warnings and advice on correct use; handled properly,
the product itself is not harmful, so it’s up to the user
to take appropriate precautions. Cutting, breaking,
drilling, hammering, grinding and chipping can all
cause fi ne silica particles, so you need to take steps
on-site to protect yourself.
Whether you are an employee or employer, you need to know about
dangerous substances. Three particular nasties are silica, asbestos, and
methamphetamine or P.
DODGING DANGEROUS CHEMICALS ON-SITEBy Mark Graham
Unfortunately, there are occasions when insuffi cient
safety equipment is used (or provided) and this is
especially dangerous when working inside due to bad
weather as dust doesn’t dissipate. Employers have a
legal duty to protect their workers.
Asbestos cancers and symptoms
Asbestos cancers are caused by the inhalation or
ingestion of asbestos, a fi re-damping substance
that was formerly used in a number of products
in construction, including fi brolite cladding and
roofi ng, vinyl fl ooring and insulation, and textured
ceilings. Lino fl ooring had asbestos backing into
the 1980s and in some cases into the 1990s.
Left alone, these components can be reasonably safe,
but when disturbed, such as during a renovation, they
can become dangerous. Sanding back an asbestos
fl oor is particularly dangerous, as is removing a
textured ceiling.
When asbestos fi bres enter the body, they can cause
genetic changes in healthy cells, resulting in cancers
such as mesothelioma (for which there is no cure). In
the United States, the Environmental Working Group
estimates that between 5,000 and 10,000 asbestos-
related lung cancer fatalities have occurred each year
over the past two decades.
ISSUE 1 :18 THE BUSINESS OF BUILDING 13
For Builders Who Want To Be Better www.bobforbuilders.co.nz
apart, and be sure to wear appropriate protective gear
when working in potentially dangerous situations. And
if you suspect dangerous products may be present,
have them tested.
The Worksafe New Zealand website offers a wealth
of information on safety on-site: http://construction.
worksafe.govt.nz/
Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.
www.buildingguide.co.nz | www.designguide.co.nz
Symptoms of mesothelioma
include:
• pain in the lower back or at the
side of the chest
• shortness of breath
• fl uid in the area around the lung
• cough
• fever
• excessive sweating
• fatigue
• weight loss (without trying)
Acute exposure to meth lab chemicals
can cause:
• shortness of breath
• cough
• chest pain
• dizziness
• lack of coordination
• chemical irritation, or burns to the skin, eyes,
nose and mouth
• death in cases where there is exposure to
a particularly toxic chemical or the person
exposed is particularly vulnerable
Do yourself a favour and get checked out if you have
any of these.
Potential health risks from P labs
The dangers presented by the drug P –
methamphetamine, or meth – cannot be overstated,
and the threat is so much greater because of its
it and charges more for decontamination. But as
she admitted, ‘Currently, like any company offering
cleaning services, these companies are subject to the
Fair Trading Act, which makes it illegal for traders to
mislead consumers, give them false information or use
unfair trading practices.’
It therefore pays to think before you start pulling things
enduring presence in houses that have been used
as clandestine manufacturing labs. The greater the
exposure, the higher the health risk. Entering a house
used as a P lab before it’s been decontaminated can
be very dangerous. And even after decontamination,
the demolition and renovation work can raise dust
containing potentially lethal quantities of chemicals.
Chemicals may enter the body via inhalation,
ingestion (for instance, eating dust that has settled
on your sandwich), or absorption through the skin.
Exposure may be acute (short-term) or chronic
(accumulative over a long term).
Chronic exposure to meth lab chemicals or by-products
may cause both long- and short-term health issues. Long-
term exposure to volatile organic compounds may result
in liver and kidney damage, neurological problems, and
increased risk of cancer. Even at low levels, prolonged
exposure can result in serious health risks.
In an interview on Radio New Zealand in 2015,
then MBIE consumer issues team leader Joanne
Kearney admitted there was no regulation of the
meth contamination testing and clean-up industry.
Consumers may be at risk of losing out if the testing
agency either fails to detect a problem, or aggravates
THE BUSINESS OF BUILDING ISSUE 1 :1814
Other key takeouts are:
• 35% of home owners choose
their builders from the quality
of their showhome first,
around the same from a referral from friends/family/
designer, and advertising was used by 15% (though
‘other’ was at 20%, whatever that was).
• Quality/Reputation of the builder was the most
important criteria, with Fixed Price/Price Certainty
the second.
• 13% of home owners had a dispute over cost (more
evidence of poor communication?) with the more
expensive homes have fewer issues.
• 80% (Canterbury) to 85.6% (Auckland) had
callbacks to fix defects, and customer satisfaction
with getting defects repaired, while improved, still
sits at barely satisfactory.
You can get your own copy here:
http://bit.ly/bldrsatis2016
Home owners rating their builder good or excellent
(4 or 5) was 67%, up 3% on the previous survey.
Overall Quality, fi nish and value were the top levels
of satisfaction.
That’s the good news.
Builders are still slack at returning to fi x defects once
the house is fi nished, with 30% of home owners being
unhappy with their contractor’s performance.
The other area showing most dissatisfaction was
communication.
Given the second most important job sourcing activity
was referrals, these two elements placing last in terms
of satisfaction can only mean builders are doing
themselves out of new jobs – let’s face it, it you don’t tell
your client what’s going on, and then don’t come back
to fi x problems, how likely are they to refer you on to
friends and family?
Key take outs from the latest BRANZ New House Owners’ Satisfaction
Survey (2016) have some good news for the industry – we’re getting
better. A bit.
• Housing, alterations and small buildings contract (NZS
3902:2004) – a plain English standard building contract.
• Thermal insulation – housing and small buildings (NZS
4218:2009) – helps establish the levels of thermal insulation
for houses and small buildings.
• Interconnected smoke alarms for houses (NZS 4514:2009) –
provides information about the placement and audibility of
smoke alarms.
• Safety barriers and fences around swimming pools, spas and
hot tubs (NZS 8500:2006) – describes barriers for residential
pools including ways to assess their strength.
• Handbook on timber-framed buildings (selected extracts
from NZS 3604:2011) – figures and tables to help design and
construct timber-framed buildings up to three storeys high.
Building CodeHub helps you to access what you need to design
and construct buildings that comply with the Building Code.
Go here: codehub.building.govt.nz
Building-related Standards on the Standards New Zealand
website has the Standards and further information. Go here:
standards.govt.nz/sponsored-standards/building-standards
MBIE recently launched a new building system search
engine, Building CodeHub, which helps people locate the
latest building rules and guidance information for designing
and constructing buildings. In addition, fi ve commonly
used building Standards and a handbook are now free to
download from the Standards New Zealand website.
By making it easier for people to access building-related
documents, MBIE hopes to see improved compliance with
the Building Code, and more importantly, safer homes and
buildings.
MBIE will continue to make the building system more
accessible and is considering ways to improve access to
more design and construction building standards.
The fi ve Standards and handbook are:
• Design for access and mobility: Buildings and
associated facilities (NZS 4121:2001) – provides
solutions for making buildings and facilities accessible to
and usable by people with disabilities.
Building CodeHub Launched – we recommend you bookmark
it in your web browser and use it!
NEW ONLINE TOOL LAUNCHED
BUILDERS BUILDING WELL; COULD DO BETTERBy Mark Graham
ISSUE 1 :18 THE BUSINESS OF BUILDING 15
For Builders Who Want To Be Better www.bobforbuilders.co.nz
AQ-180615-CMNZ
Choose J-FRAME, it’s straight, strong and durable. With its CodeMark product certification, you have the added assurance that it’ll perform the way you expect it to.
Visit our product page www.jnl.co.nz/product/framing-j-frame
A PREMIUM ALTERNATIVE TO TRADITIONAL SOLID TIMBER FRAMING
choose a product that’ll go the distance
a sandcastle isn’t around for long...
THE BUSINESS OF BUILDING ISSUE 1 :1816
This impacted on the poor more than anyone else as
the rich and middle-class bought down and those with
less to spend, and fi rst-home buyers, were forced out
as prices took off due to a shortage of supply. Once the
housing market exploded, short-term investors (almost
all New Zealanders according to research) climbed in and
prices accelerated further.
And now here we are, post-election, with the Labour-led
coalition looking to implement their signature ‘Kiwibuild’
proposal to resolve a shortfall estimated at around
77,000 homes, by building 100,000 homes over and
above normal building activity in the coming ten years.
It’s a big ask.
Our belief, however, is that “Where there’s a will there’s
a way” and we hope that becomes the attitude that will
be applied to support the future endeavours for this
government to resolve the housing crisis, although we
acknowledge it won’t happen overnight. And even if we
don’t hit those numbers, KiwiBuild will do two things:
1. It will end up at least making a significant impact
on the shortfall – much more than the ‘Special
Housing Areas’ ever were going to, and…
2. It will support a building industry that would
otherwise likely go into another ‘bust’ period.
But let’s set the scene
Affordable Housing and Social Housing are not the same
thing.
Affordable Housing is available for private ownership, but
at a price that people can realistically afford – usually set
at around 3x annual household income. That would make
a new house affordable at $300,000 as the average
household income is $100,000 per year. Unfortunately,
in Auckland and Queenstown, the average house value is
about $1,000,000.
The primary driver of this is the cost of land. If a section
is worth a lot, there’s no point building a small, cheap
house, so you get an expensive house built on an
expensive block of land, and people on lower-incomes
can’t afford to buy them.
Social Housing is owned by the State and made available
to people who can’t otherwise
afford market rents. Sometimes
they’re sold to the tenant
through different schemes,
including rent-to-buy. It’s very
likely that your own parents
bought their fi rst house in this
way.
Introduced by the Labour government post-World War 2,
the original State House programme created jobs,
provided badly needed, good-quality housing at a
moderate rent and even the opportunity to purchase
these houses at the initial building stage.
The original developments were located in designated
areas with limited individuality in design. Two basic
concepts were developed: single-storey individual
housing and two-storey apartment blocks.
Funding for maintenance for aging buildings has always
been an issue, not helped by repairs needed because
of certain tenants’ attitudes to their accommodation,
but more so in recent years as the National government
didn’t see government having a role in providing housing
for poor people.
Now the traditional state house model is changing. The
state-owned houses are mixed in with privately owned
properties, making it impossible to tell which is a social
house and which is in private ownership. And that's
deliberate – to remove the stigma traditionally attached
to social housing.
Also, what we’re building is changing. There’s less
demand for traditional 3/4 bedroom houses as the
makeup of households changes. There’s more of a need
for 1/2 bedroom homes, and 5 + bedroom homes – less
in between. And, of course, there’s a move to higher
density, with townhouses and apartments becoming
more common. This will accelerate in all our cities.
There’s an unquestionable need for more houses and
it’s clear inadequate housing impacts on children’s
health (and ours), which results in a drain on our health
services and more – education outcomes, poverty and
crime – it all starts with inadequate housing. KiwiBuild
will have a huge and positive impact on New Zealand,
not to mention make sure you have a job for years to
come!
The Housing Crisis became one the major election topics well before the election. National lost the ball during the GFC when an already shortfall of housing turned into a crisis as the building industry collapsed post-2008. National’s faith that the ‘Market’ would eventually fix everything proved to be misplaced.
COVER ARTICLEWHERE THERE’S A WILL THERE’S A WAY Alan Muxlow and Mark Graham look at Labour’s
KiwiBuild programme and how it’s going to affect
the industry.
ISSUE 1 :18 THE BUSINESS OF BUILDING 17
For Builders Who Want To Be Better www.bobforbuilders.co.nz
So what are the promises?
The Government will make these forecasts a reality by:
• delivering 100,000 affordable homes through
KiwiBuild
• building more state houses, rather than selling off
the ones we have
• ensuring there is enough skilled labour, through
immigration settings and training initiatives
• freeing up land supply
• enabling infrastructure financing
• enabling higher productivity in the building
industry.
“The Government’s housing package will deliver
more affordable homes, more state houses, improve
the quality of rentals and security of tenure, and tilt
the balance in favour of homebuyers, rather than
speculators,” said Phil Twyford, the new Minister
of Housing.
Twyford outlined how there would be three ways the
Government would implement KiwiBuild:
1. Stepping into already-under way schemes like
Hobsonville Point and securing a large number of
planned new residences there;
2. Buying off-the-plan units in planned
developments like new high-rise Auckland CBD
apartment blocks;
3. Creating its own development sites and bringing
in group house builders, particularly on Crown-
owned land.
Apartment/terraced housing developers and fi rst-
home buyers struggle to get bank funding but he said
KiwiBuild could be a huge assistance, taking off-the-plan
units before construction started.
The Government will under-write or buy
off-the-plan dwellings in new private
developments, e.g. Hobsonville Point, by
purchasing 30 to 40 per cent of the terraced
homes and apartments that fi t the KiwiBuild
criteria. Buying off-the-plans is thereby
guaranteeing high-quality affordable homes
and we would then on-sell them to fi rst
home buyers. That would de-risk many
developments, and solve the problem
fi nancing has been for fi rst home
buyers and for developers.
The rationale for KiwiBuild is that
the market on its own has really
struggled to deliver affordable
homes. KiwiBuild aims to deliver
medium-density townhouses and
terraced housing for $500,000
and under and stand-alone
homes, mostly on the fringes
such as Auckland's north west
and the south, for $600,000.
Phil Twyford in his 1st
December speech stated:
We are going to put the state
back into state housing.
Our Government rejects the view that state housing
is a redundant idea from the 1930s and that
modernisation means selling off the houses and
getting charities and the private sector to do this
work instead.
Given the state of the housing market right now,
it should be clear to anyone that state housing –
decent, secure, income-related rental housing for the
people that need it most – is needed more than ever.
Our Government will not milk Housing NZ for profits.
We will reinvest any surpluses back into the building
of new homes and upgrading existing ones.
We will stop the mass sell-off of state housing.
I want Housing NZ to be a world class public housing
landlord.
Government has also recognised they alone do not have
THE BUSINESS OF BUILDING ISSUE 1 :1818
This inevitably fl ows into the building market – Rodney
Dickens, from SRA Consulting, has shown a clear
correlation between the housing marketing and building
activity. So after years of ramping up resource to meet
growing demand, there is a good chance that demand
will fall away.
What KiwiBuild will do will replace the falling demand
with a major works programme that will need enormous
numbers of builders and tradespeople. Your job, should
you wish to keep it, is looking pretty secure for the next
ten to fi fteen years, at least, regardless of the number of
robots entering the market.
More than this, however, is that this huge social
housing programme rolling out will mean poor people
moving into quality housing and out of cars. It should
mean better targeting housing, too, instead of single
occupants in three bedroom houses on large sections,
or families with fi ve kids crammed into the same sized
dwelling, poorly maintained dwellings where diseases of
poverty, like rheumatic fever, appearing in New Zealand
is a terrible indictment on our society. This should not
be the case in our country and maybe this is a chance to
eradicate this blight.
all the answers and so have formed a panel of experts to
do a housing crisis stocktake. At the time of writing, this
report had not yet been released.
What are the major challenges?
Land has always been a problem.
Firstly, metropolitan limits around cities have been
identifi ed as a major problem. Land values outside the
limit is a tenth the value of land inside, and the limit
ensures there’s only so much available. Critics of this
view point out that despite the limit, there’s plenty of
land available inside the boundary and we’re still not
building enough.
There are some investors who are ‘land-banking’
– holding onto large tracts of land without
developing. And there’s some logic to this – there
are rates to pay, but they’re relatively minimal,
and the value of the land in the past few years
has been increasing in a spectacular fashion, and
the owners haven’t had to do anything to enjoy a
huge increase in their personal wealth so why go
through the pain and stress of developing? The
Government has threatened to impose penalties
for no development to overcome a shortfall
in some areas, but it would likely not be very
popular – at least, not for the land owners (but
they aren’t likely Labour voters, anyway).
Materials are already a problem in some areas,
particularly keeping up with demand for timber
and concrete. Unfortunately, as we all know, as
demand grows, price does too.
Skilled labour shortage is probably the biggest factor
of the three. The government has already made the fi rst
step for new learners a lot easier by offering free tuition
for the fi rst year of study, but we have a shortfall now
and will do despite ramping up apprenticeships.
Responses
1. Prefabrication, including importing component
parts (many villas in New Zealand were built
this way)
2. More consistent house designs
3. Ramping up Group Home Builders
4. Special immigration categories for tradespeople
5. New higher density housing typologies
What next?
A ramped-up state house building programme is going
to mean an ongoing demand for trades and most people
in related industries.
As we near the peak of the current housing cycle (see
the interview with Rodney Dickens in this issue) there
is every possibility that there will be a downturn, or
at the very least, a plateauing in the housing market.
ISSUE 1 :18 THE BUSINESS OF BUILDING 19
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Because Smartfit® windows are so easy and fast to install, you’ll free up a lot of time for other things. And while you’re doing these other things, you can rest assured that your windows come with an impressive 10 year warranty. So hook yourself up with Smartfit® for your next build. Visit smartfitwindows.co.nz or call 0800 031 031.
Nails or screws? Softbaits or pillies?The most common questions from builders who install Smartfit® windows.
Made exclusively by:
FLA0306
THE BUSINESS OF BUILDING ISSUE 1 :1820
FEATURES
Building activity should have a corresponding fall,
too, as this sector is closely tied to the health of the
housing market. Last time this happened, post the
GFC in 2008, the building sector saw a 60 % drop in
demand and a huge exodus of skilled staff. That didn’t
leave us in good shape for the boom that started fi ve
years ago – and we’re still playing catch up.
So, less demand and more expensive borrowing
means house prices drop or stagnate. And that follows
a pattern we’ve had in New Zealand for decades,
where house prices generally follow seven years'
growth and three years' plateau.
We’re entering that seventh year of
growth in New Zealand now and, we’ve
seen some wobbles over the past year.
We’ve had Brexit, Trump, our own
election, and tightening Loan Value Ratio
rules put in place by the Reserve Bank
(meaning you need a higher deposit to
buy, especially if you’re an investor).
All that is now compounded by a general
tightening of lending criteria from the Aussie-owned
trading banks (caused by exposure to the Australian
apartment market which seems to be tanking) which is
impacting on house buyers and developers alike.
“In past years the banks have just shovelled out
money into a runaway housing sector right up to the
point where the bubble bursts,” says Dickens. “This
time, they seem to have learnt from the GFC and are
actually tightening up before there’s a big correction.”
Motu Consulting released research earlier this year
that confi rmed a pattern of fi rst Auckland and
then regional New Zealand centres following on
from Australian cities’ housing market. Sydney and
Melbourne markets,
notwithstanding
oversupplied apartments,
are still going strong, so
New Zealand may yet
have a bit of life in the run yet.
So what’s that got to do with Building, then?
Dickens has done extensive research that shows a
strong correlation between house prices and building
activity. House prices go up, activity follows six-12
months later. Likewise, house prices go down, building
follows suit.
So normally a slowing housing market would mean
a downturn in the building sector, but that may not
happen this time around.
“Labour has changed the game,”
says Dickens. Labour’s ‘KiwiBuild’
programme, an ambitious goal of
building 100,000 new homes across
the country over the next ten years,
with 40% in Auckland, will likely keep
the building industry pumping, even if
Labour’s ambitious targets are missed.
Simon Wilson from the Spinoff reported
on a recent construction industry conference:
“…Labour wants to build a lot more houses, use government investment to smooth out the boom and bust cycles of construction, scale up the building programme to provide more reliability, upskill the local workforce.”
So there’s political will to invest strongly in the
building sector. But what is going to change is the
different kinds of housing we build.
We desperately need more affordable housing.
But because the cost of land is so high in areas
where demand lies, it’s simply uneconomic to build
a relatively cheap house, so we continue to build
Both of the two main drivers of the housing sector - net migration and Interest rates – are going to come under pressure in coming years, says Rodney Dickens, director of SRA consulting. As the housing market slows and potentially even drops, that should see house price inflation drop away and houses become more affordable.
STRONG GROWTH FORECAST FOR BUILDING INDUSTRY BUCKS HISTORY By Mark Graham
Labour has
changed
the game…
ISSUE 1 :18 THE BUSINESS OF BUILDING 21
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Employment’s report to the new Minister of Housing,
Phil Twyford, there’s a lot of homes to build – and
that’s on top of the 22,000 per year we need just to
stand still.
And when we need many of those houses to be less
than half the current median price in Auckland, a
number of commentators, including Dickens, think the
key is to build on the outskirts of the city.
“Keeping a Metropolitan Urban Limit, even in its new
form of ‘Rural Urban Boundary’, creates an artifi cial
line around which land on one side is almost twenty
times higher than on the other – and high land prices
means you have to build expensive houses to make
money.
“If we open this land up to developers to create new
suburbs, it means we can build smaller, cheaper
houses on cheap land – and houses become
affordable again.”
This begs the question of infrastructure development
and the cost of travelling to places of work kilometres
away. And the council argues that the Future
Urban Areas – those earmarked for timed release
to developers – encourages planned infrastructure
building in a controlled, and therefore effi cient,
manner, rather than spotty patches that makes public
transport and utilities expensive to provide.
In fact, city planners actually want both types of
buildings – intensifi cation within the old Metropolitan
Limit and old-style ‘Vim Valley’ style homes in the new
areas on the outskirts of the city, with more planned
for within the old urban limit than outside. Either way,
building looks set for a prolonged period of ongoing
demand and activity.
Rodney Dickens is Director of SRA consulting, www.sra.co.nz, an independent economic consulting firm with a specialisation in the housing and building sectors.
Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.
www.buildingguide.co.nz | www.designguide.co.nz
McMansions, even though what we need is one and
two bedroom houses, and family homes that people
on lower incomes can buy. Larger Polynesian families
need fi ve bedroom homes, but because many are in
lower socio-economic groups, they can’t afford 300
square metre, three living-roomed, fi ve bathroomed
fully tiled monsters.
There is less of a problem in regional centres as
demand is not high (with a couple of exceptions like
Tauranga and Queenstown). Internal migration is away
from small towns to larger cities and immigrants are
drawn to the larger centres because this is where the
jobs are. And don’t think New Zealand is exceptional.
This is being seen all around the world, as are house
price increases throughout much of the Western
world.
But not in all cities. Those with much less constraint
on what can be built and where, like Houston, Tokyo
and Montreal, are seeing an abundance of housing
being built and that keeps prices low, hence Labour’s
policies.
Pre-fab housing, large suburban developments with
cookie-cutter homes, terrace housing, duplexes and
triplexes, town-houses and apartments are all the
future for our main centres. BRANZ estimates 60%
of new dwellings in Auckland will be medium density.
Builders will need to be skilled in this type of building,
which is different to stand alone houses.
Ironically, this type of housing is actually more
expensive to build, but if we build smaller and we build
at scale, so we can achieve economies, the cost should
come down.
So while boomers subdividing their large inner-city
suburban sections and building a new house on the
rear section, or putting up three or four townhouses
on their subdivided property may be a trend, it’s one
unlikely to contribute too much to solving the housing
shortage. A subdivided property that’s worth $1.5m is
still worth almost $1m afterwards – so building a cheap
house doesn’t make sense. We will get more housing,
but it won’t be affordable.
When you have a shortage of 65,000 homes, as
estimated in the Ministry of Building, Innovation and
THE BUSINESS OF BUILDING ISSUE 1 :1822
For insurance that’s CUSTOM-MADE for builders call Builtin.
0800 284 584
builtin.co.nz
N E W Z E A L A N D ’ STRADE INSURANCE EXPERTS
A lot of builders think all their jobs come from
‘Word of Mouth’ marketing. It begs the question, if
recommendations get builders jobs, how do dodgy
builders manage to stay in business?
The answer, of course, is that jobs come to builders
from a myriad different sources, even if it begins with a
recommendation.
Advertising is one – whether such traditional channels
as Yellow or newspapers, or newer media such as
Google Adwords or pop up ads on apps on your
phone. Signs on a building site, radio ads, or TV if you
can afford it.
And pretty much everyone these days checks you
out on the internet – they look
for your website, they look for
recommendations – even when
they’ve been referred on from a
friend.
So how do people fi nd a builder?
Referrals
The fi rst thing people do is ask friends for a
recommendation. Friends and family – who’ve they
used, who would they recommend. Not always the
best way – hence the staying power of dodgy builders.
The smart clients check those recommendations
out – starting with the internet and looking at the
builders’ websites, moving on to review sites like www.
builderreviews.co.nz, and then asking to view fi nished
jobs. Still doesn’t always prevent bad experiences, but
it will minimise the risk.
The single most important thing here is to do great
work. Quality, care and respect. If you don’t show these,
"Being memorable equals getting picked." - Jeffrey Pfeffer, Professor of Organizational Behavior at the Graduate School of Business, Stanford University and author of 14 books on successful businesses and businesspeople.
THE MYTHS OF ‘WORD OF MOUTH’ MARKETING FOR BUILDERSBy Mark Graham
ISSUE 1 :18 THE BUSINESS OF BUILDING 23
For Builders Who Want To Be Better www.bobforbuilders.co.nz
why would you expect anyone to recommend you?
The second thing here is to be fair, honest and easy
to work with. I know a really great architect who does
amazing work, but he’s got such a reputation for being
diffi cult that most of the work he does is for himself.
There’s no value in that, except in being memorable for
all the wrong reasons.
Showhomes
Many people head to Showhomes to see what building
companies can provide. Of course, these are going to
be the very best of their work with every imaginable
extra included, because they’re looking for a sale, but
it’s a very valuable tool for the larger companies.
But many people don’t necessarily have friends who
are builders or haven’t used one recently, and many
don’t want a cookie-cut solution for their new home, so
those avenues can often go nowhere.
So what’s the next option?
Traditional advertising
Firstly, people are exposed to advertising. It’s
estimated that you will get hit with up to 5,000
advertisements every day. Yes – that’s fi ve thousand.
And for those of you who think it doesn’t work – well,
why else would companies spend so much money to
get you to buy their product? And look at yourself –
what toothpaste do you use, what car do you drive,
what sports shoes do you wear? All advertised!
If you’re a large company then you can afford TV,
or radio, or newspapers to get your name in front of
people likely to be thinking about building. They’re
expensive because they reach a lot of people (almost
all who are not in the market for your services). The
ads are all about showing what a great job you do,
what happy customers you have, and how much they
can trust your company to do a great job.
The right magazines, like the Building Guide, can be
very good, too. It’s all about hitting the right people
when they’re in need of your service and specialist
publications like the Building Guide are perfect for this.
Brand advertising sets people up with a predisposition
to prefer that brand. It’s a long-term strategy that
takes a long time to pay off, but is very effective when
done well. Recent research shows that companies
that focus on immediate response-type advertising,
as most internet ads are, see diminishing returns over
years as their brand image gets frittered away. Think
Coke, or car brands.
Yes, they may have special offers on occasion, or new
models, but the tone of their messaging is consistent,
and they’re targeting a specifi c psychographic (what
people think), as well as specifi c demographics (how
much money they have, or their profession), and they
do it year after year – because it drives memorability
and desire and that drives sales. When you come to
buy something, you’ve already got a list of brands
you’re considering before you do research, because
you’ve been exposed to their advertising.
But if the client doesn’t want to use one of the big
group home companies to build their home, what do
they do next? And more importantly, how do they fi nd
you?
Search engines and optimisation
That brings us to the second step. That step is the
internet and likely a Google search (there are other
search engines, but almost no one uses them). This
is why it’s imperative these days to have a website.
It’s the fi rst place people go, even when they’ve been
referred on by someone. They want to see what work
you’ve done, what the tone of the business is like – will
that tone likely fi t them like the car they drive (see –
branding is everywhere).
If there’s not a specifi c builder someone’s searching
for, then it becomes a generic search, like ‘Auckland
Builder’, or ‘Nelson Builder’, or even ‘recommended
builders’ etc….
This is great if you’re ranked in the top 20 ‘organic’
results (not paid advertising), but if you’re ranked
past 30 you’re toast – almost no one goes past three
pages. Making your website ‘Search Engine Optimised’
will help your ranking but it’s a slow process, very
competitive and expensive. Companies pay specialists
thousands of dollars each month to ensure they’re
ranked highly, which is why it’s often (again) the big
companies at the top.
Google adwords
Again, if you don’t have the budget for SEO, then
you can pay for Google Adwords, so you appear
in the ‘advertising’ sections that appear alongside
the organic results. Unfortunately, this works on an
‘auction’-type scheme. You nominate how much you
want to pay per click. The more popular search strings
mean you pay a commensurately higher amount. There
are clever things you can do, like bidding to be at
number 2 or 3, but when your daily budget runs out,
you’re off the list unless you put more money in, or
your next day’s budget kicks in. So it’s cheap to be a
Horowhenua builder, but not an Auckland builder.
The other downside here is that you’re paying for
people clicking on your link who may not be interested,
THE BUSINESS OF BUILDING ISSUE 1 :1824
AN ELEGANT & TIMELESS COLLECTION OF
SStone Basin
www.bathandtile.co.nz
132E Cavendish Dr, Manukau, Auckland T: 09 263 0145 | F: 09 263 8404 | M: 022 043 1589 | E: [email protected] 7B Douglas Alexander Parade, Auckland T : 09 263 0145 | F : 09 263 8404 | M : 027 787 4736| E: [email protected]
and you may be paying for bots – bits of software
searching links for search engines and marketing
companies, or hackers looking for email addresses to
add to scam lists. There are estimates that up to 50%
of click-thrus are bots – and you pay for every single
one of them.
It’s generally best to pay an expert to work the
system as best as they can for you. This can make the
difference between paying lots for no result, or paying
a bit less and getting good results.
Directories
Once upon a time, in a past life we’ve all forgotten,
there was the Yellow Pages. Its migration to the
internet didn’t go that well. They didn’t adapt their
offering to the new medium and the platform they
created didn’t work overly well. There’s still the
power of the ‘Yellow’ brand, however, but they have
competition from directories that are equally broad in
the number of categories they cover, with a resulting
dilution in effectiveness, and specialists like the
Building Guide website.
The likelihood of someone going to Yellow to do a
search for a builder is somewhat diminished when
you can start straight away with Google and bypass it
altogether. Yellow is now changing the business it’s in
by offering some of the services mentioned above to
their clients.
Specialist directories still have a place. If people are
visiting sites they know to contain useful information
about a topic they’re researching, then it makes sense
they’d use the same site to look for services and
products – and trust them to deliver good results.
Remarketing and retargeting
By placing a ‘cookie’ on a website visitor’s computer,
websites can recognise when they come back and
reload things like passwords and preferences.
It also means that companies can now learn what other
websites people visit. When you sign in to Google and
Facebook, the same thing happens. You may not be
aware, but if you don’t log out of Facebook each time,
it tracks your website movements, even when shut
down. This is why you now get banner ads showing
you that mountain bike you were just looking at – just
in case they can get you to reconsider…
The future
Ultimately, marketers are going to know exactly
what you want, often before you know yourself. This
is coming and the only thing you can do about it is
to block ads on your browser and refuse to accept
cookies. Even then, they have ways of fi nding stuff out.
The trade-off is the convenience of using the internet.
It may be creepy, but it’s the future so you may as well
take advantage of it.
Conclusion
So back to word of mouth marketing.
Word of mouth happens when someone has a problem
that needs solving and they share that problem with
someone:
“We’re looking to build – do you know a builder?”
Can the person they’re talking to help them solve their
problem? And are you the person they’ll recommend?
So – try to be that person they recommend:
“I had a great experience.”
“They were excellent to work with – clear
communications and no surprises.”
“Their work was excellent.”
“When we fi nished, they gave us champagne and a
photo album of the build – we didn’t expect that!”
What are you going to do that will leave a lasting,
positive memory of that project that will mean you’ll be
the fi rst person recommended when someone is asked
that question?
And what else are you doing to make sure that
everything you do reinforces that good feeling
– your advertising, your website, your staff, your
communications to your clients?
And at the end of the day, be remembered. For the
right reasons.
Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.
www.buildingguide.co.nz | www.designguide.co.nz
ISSUE 1 :18 THE BUSINESS OF BUILDING 25
For Builders Who Want To Be Better www.bobforbuilders.co.nz
ISSUE 1 :18 THE BUSINESS OF BUILDING 25
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Each year thousands of construction projects are
undertaken. The industry is vast, subcontracting is the
prevalent means of undertaking most construction
work, a considerable amount of industry knowledge is
empirically acquired, expectations are always high and
seldom well communicated, costs are high compared
to most other transactions, and contractors often
undertake projects of great complexity and risk.
Despite the best of intentions, it is not diffi cult to
understand why disputes are a common and natural
consequence of such an environment.
It is important therefore that you are aware of the
processes available to you to resolve any disputes
arising under your construction contract. We set out
below a brief summary of your options. You should
ensure you are familiar with these before you enter into
any construction contract and make sure your contract
provides for arbitration as the ultimate and fi nal
dispute resolution process (see section on arbitration
to follow).
Negotiation
Negotiation is the primary method of dispute
resolution used by parties in confl ict to resolve
disputes. Negotiation is an informal, infi nitely fl exible
process whereby parties, or their representatives,
bargain with each other for individual or collective
advantage for the purpose of reaching an agreement
on courses of action and/or for crafting an outcome
that best meets their mutual interests.
Negotiation is the least formal and least expensive
process for resolving disputes, but its effi cacy
is dependent on the parties’ ability to enter into
meaningful and constructive dialogue in good faith
without the assistance of a third party.
Negotiation should always be the fi rst process utilised
by a disputant to attempt to resolve disputes, but for
obvious reasons, many parties are simply unable to
disentangle and remove themselves suffi ciently from
their sense of grievance and the emotional stress and
the detail and other drivers of the dispute to negotiate
effectively without the
assistance of a third party.
Where direct negotiation fails
to resolve a dispute, parties
will need to engage in a formal
dispute resolution process such
as adjudication, mediation, or arbitration. An entity
which can assist you is the Building Disputes Tribunal,
which is recognised and respected as the leading
independent nationwide provider of specialist dispute
resolution services to the building and construction
industry in New Zealand.
Adjudication
Statutory adjudication under the Construction
Contracts Act (Act) is the most commonly used
dispute resolution process in New Zealand for
resolving building and construction disputes, offering
a unique, fast, and relatively straightforward statutory
process for resolving disputes that arise under
construction contracts. Adjudication is quick and cost
effective. Most disputes are resolved in less than six
weeks from the time the process is initiated. The Act
applies with very few exceptions to every construction
contract that relates to the carrying out of construction
work in New Zealand including contracts for design
work, engineering and quantity surveying. Any party
who has a dispute or difference with any other party to
that contract can refer that dispute to adjudication.
A claimant (the party referring a dispute to
adjudication) may secure the appointment of an
adjudicator with the Building Disputes Tribunal within
24 hours of making an application. A claimant does
not require the agreement of the respondent to apply
to the Tribunal for the appointment of an adjudicator.
The respondent cannot delay, avoid, or avert the
adjudication process and will be bound by the
outcome whether or not the respondent participates in
the process.
Any party to a construction contract has a right
to refer a dispute arising under that contract to
adjudication. Accordingly, it is not necessary to
include a reference to adjudication in the underlying
construction contract.
The Building Disputes Tribunal offers a fi xed fee
adjudication service for disputes of limited complexity
and for a monetary value less than $50,000.00. This
Construction projects are a highly complex undertaking – even residential projects. Complaints and disputes arise as a matter of course, so we went to John and Catherine Green at the Disputes Resolution Tribunal for advice on the path to settling issues…
DISPUTES WILL HAPPEN – HERE’S HOW TO DEAL WITH THEMBy Mark Graham
THE BUSINESS OF BUILDING ISSUE 1 :1826 THE BUSINESS OF BUILDING ISSUE 1 :1826… c o n t i n u e d o v e r l e a f
provides the parties with certainty as to the cost of
having their dispute determined.
The default position under the Act is that the parties
will bear their own costs and share the adjudicator’s
costs in equal proportions, although the Act does
provide for an award of costs against a party where
that party’s allegations or objections are without
substantial merit, or that party has acted in bad faith.
Arbitration
Historically, prior to the enactment of the Construction
Contracts Act in 2003, arbitration was the favoured
means of resolving building and construction disputes.
Arbitration is a formal dispute resolution process
whereby two or more parties agree to submit all or
certain disputes between them to an independent
person called an arbitrator, for a binding decision. The
process is governed by the Arbitration Act 1996. An
arbitrator’s decision, called an award, is binding on the
parties and is enforceable as a judgment in the High
Court.
The objective of arbitration is to provide a fl exible
and effi cient means of resolving disputes quickly,
cost effectively, privately and confi dentially without
necessarily adhering to the formalised, technical
procedures of litigation.
Whilst arbitration is closely related to litigation,
there are several key differences which make it an
important and attractive alternative to state litigation.
In particular, arbitration gives the parties the power
to choose their own decision maker, place and time of
hearing, and as far as they can agree, to control the
arbitration procedures which may be varied to suit the
nature and complexity of the dispute.
The key differences between adjudication and
arbitration are fi rst, that no agreement is required to
refer disputes to adjudication because it is a statutory
dispute resolution process whereas arbitration is
consensual, and second, that adjudication is binding
in the interim (the dispute may still be litigated or
arbitrated when arbitration is provided for in the
construction contract), however, an arbitrator’s award
is binding and enforceable subject only to limited
grounds of appeal. That said, in the vast majority of
cases an adjudicator’s decision (a determination) will
be accepted by the parties with no further recourse to
litigation (or arbitration).
The Building Disputes Tribunal offers fully administered
arbitration processes, including a suite of arbitration
rules for expedited arbitrations to be conducted
within 45, 60, or 90 days. The Tribunal also offers a
fi xed fee service for disputes of limited complexity
and for a monetary value less than $50,000.00. This
provides the parties with certainty as to both the time
and cost which will be incurred in having their dispute
determined.
If parties wish to access these services, it is
recommended that the Tribunal’s model arbitration
clause be included in the parties’ construction contract
(although parties may also agree after a dispute has
arisen to refer that dispute to the Tribunal):
“Any dispute or difference arising out of or in
connection with this contract, or the subject matter
of this contract, including any question about its
existence, validity or termination, shall be referred to
and fi nally resolved by arbitration in accordance with
the Arbitration Rules of the Building Disputes Tribunal.”
Mediation
Mediation is a consensual, confi dential and relatively
informal negotiation process in which parties to a
dispute use the services of a skilled and independent
mediator to assist them to defi ne the issues in dispute,
to develop and explore settlement options, to assess
the implications of settlement options and to negotiate
a mutually acceptable settlement of that dispute which
meets their interests and needs.
The objective of mediation is to enable and empower
the parties to negotiate and resolve the dispute
promptly, cost effectively and confi dentially rather
than to have a decision imposed upon them by a judge,
arbitrator or adjudicator. Mediation enables the parties
to negotiate fl exible and creative solutions which need
not conform to strict legal rights or general community
standards.
Parties can agree to mediate at any time and it is not
necessary to have a clause requiring mediation in your
construction contract. However, it is worth noting
that the Building Disputes Tribunal is able to appoint
mediators experienced specifi cally in construction
disputes and you may therefore wish to include the
Tribunal’s model mediation clause in your construction
contract to ensure that any mediation service is
provided by that Tribunal. The relevant model clause is
below:
"In the event of any dispute or difference arising out
of or in connection with this contract, or the subject
matter of this contract, including any question about
its existence, validity or termination, the parties shall
refer that dispute to mediation in accordance with the
mediation rules of the Building Disputes Tribunal."
It should be noted that the Building Disputes Tribunal’s
ISSUE 1 :18 THE BUSINESS OF BUILDING 27
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Code Description Length Height
ADJWP120 Folding 3 step 450mm wide work platform adjustable legs 1200mm 0.6m - 0.85m
ADJWP085 Folding 3 step 450mm wide work platform adjustable legs 850mm 0.6m - 0.85m
LOAD RATING
150KG
h Height
m 0.6m - 0.85m
m 0.6m - 0.85m58060.6m - 0.85mm
58060.6m - 0.85mm
THE BUSINESS OF BUILDING ISSUE 1 :1828
arbitration rules provide for a mandatory stay of the
arbitration proceedings in cases where the parties
agree to mediate after the arbitration has commenced.
Litigation
Litigation is the resolution of disputes between parties
via the court system. However, parties to construction
disputes do not generally use litigation because such
disputes typically involve a large number of issues,
considerable technical detail and vast quantities of
documents which often leads to lengthy delays and
can make litigation expensive.
While the Disputes Tribunal does offer a simple legal
process that can be applied to construction disputes
on the basis that it is used to recover a disputed debt
up to $20,000, the technical nature of most disputes
often requires the appointment of an independent
expert by the Referee and can result in multiple
hearing dates over an extended period before a
decision can be made.
Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.
www.buildingguide.co.nz | www.designguide.co.nz
Given the accessibility of information about ‘technology
based sustainability’, the fi rst step is to educate yourself
on how a home can become a smart living environment.
Designing the future
For many years, a signifi cant proportion of the building
industry has left environmental concerns to those with
green ideals and a preference for organic food. However
rising awareness of energy costs and diminishing
resources have prompted a collective rethink on the
value of sustainability.
How we consume fuel, power and water have become
major issues. Both governments and businesses are
reacting to diminishing energy resources and the effects
of climate change. Architects, designers, builders and
suppliers are now placing more focus on sustainable
energy use. Most are seeking to specify smarter
products, streamlined design systems and refi ned
construction processes that meet the rising demand for
energy effi ciency.
As a client looking to create an energy-effi cient,
sustainable home it is in your best interests to research
the wave of sustainable technology now available.
Sustainability as a long-term investment
During years of rampant consumerism, product
longevity was largely overlooked. Replacement was a
convenient if wasteful solution in case of failure or wear-
out. However, the usable life of materials and systems
is crucial to sustainable design. The longer an item is
serviceable, the less need there will be to expend further
energy replacing it.
After 20 years of design experience
I have come to regard 'function and
beauty' as essential pre-requisites of
any creative endeavour.
However, these elements are of little
value if the materials used and workmanship applied
are lacking. Buildings must be ‘designed for the future
and crafted to last’, factors that require both forward
thinking and ethical commitment, each more critical
than ever in a rapidly adapting world.
When constructing new homes, we must consider the
long-term vision of investing in technologies that offer
substantial rewards over the life cycle of the investment.
This means recognising the value of spending a greater
proportion of the initial budget on quality (materials,
products and processes) and less on achieving basic
volume. ‘Less is more’ may initially sound counter-
intuitive but when considered in terms of living quality
and return on investment, the benefi ts soon outweigh
short-term savings.
Choosing carefully — selecting products and systems
When we look at the annual running costs of a home,
a comparison can be made to those considered when
buying a car. Fuel effi ciency is usually paramount, along
with the potential expenditure on fuel over the vehicle’s
likely life cycle. It’s only a small step to extend this
analogy to home design.
Designing an energy-effi cient home involves balancing
the effect of passive systems such as using solar heating,
with more active, technology-based solutions. The effect
of the whole must suit your needs within the home and
Through greater understanding of smart technologies, your home can be designed to function at lower annual running costs while providing a more sustainable and comfortable living environment.
THE TECHNOLOGY OF ENERGY EFFICIENCYBy David Ponting
ISSUE 1 :18 THE BUSINESS OF BUILDING 29
For Builders Who Want To Be Better www.bobforbuilders.co.nz
be within your budget. It must also be relevant to New
Zealand’s environmental context.
As keeper of the vision for your new house, it’s crucial
that you drive this process. It is up to you to ensure
the sustainability advantages that can be achieved are
locked into the brief, and their ongoing importance
clearly communicated to your design team and the
various tradespeople involved in the construction
process.
Through your own research, you are sure to uncover
other products that may be relevant, so it’s important
to keep an open mind in the early stages. The following
covers a range of smart technology solutions through
to technical products that deliver energy effi cient home
solutions:
1. Double-glazing systems
Windows allow significant thermal loss (or gains) and also
cause condensation. Double glazing systems incorporate
an insulating cavity between the panes that greatly
reducing these issues.
2. Glazing technology
Specialised glass can improve building comfort and
performance. For example: glass with ‘lowe’ coating
enables short-wave solar energy to enter a building while
preventing warm air from escaping.
3. Ground source energy
A ground source heat pump transfers heat to or from the
earth, extracting latent energy that exists below ground.
This lessens the seasonal power requirements of heating
and cooling systems.
4. Heat pumps
These enable mechanical extraction of latent heat energy
from external air using temperature differentials. This can
achieve cost-efficient heating or cooling depending on
the season.
5. Heat recovery ventilation (HRV)
This is a mechanical system that redistributes hot or cold
air between home zones, improving climate control and
reducing the energy requirements of heating and cooling.
6. In-slab heating
Underfloor radiant hot water pipes set within a concrete
slab provide heating to the floor. This is a consistent
and efficient heating method that takes advantage of
structural thermal mass.
7. Long-life lighting
Low energy, long lasting light sources save on power
usage and replacement costs. LED lights are a good
example.
8. Solar power
Solar power systems use energy from the sun for domestic
electricity supply and water heating. These are commonly
recognised as roof-mounted cylinders, piping systems
or photovoltaic panels. Tesla have recently introduced
glass roof tiles that double as photovoltaic cells at a price
comparable to a normal roof.
9. Thermal insulation
Thermal insulation reduces unwanted heat loss or gain. It
also achieves major reductions in the energy required to
mechanically heat or cool interior spaces.
10. Thermally broken window joinery
Non-conductive ‘thermal breaks’ integrated within
aluminium joinery counter the direct thermal bridging
that occurs between a window’s interior and exterior
components.
11. Thermostatic and time control systems
Time control mechanisms provide the ability to schedule
operation of environmental control systems. Your heaters,
pool pumps and other appliances can be turned off to
minimise energy usage during periods where buildings
are unoccupied; curtains can be set to automatically close
when the sun goes down in winter.
12. Wind turbine power
Residential scale windmills let you generate your own
electrical power by harnessing wind energy.
Self-education is vital
There are many websites providing impartial
information and others by companies promoting the
products and services they offer. It is important to
spend the time researching before you start building.
Following are some industry-based information
resources:
www.buildingguide.co.nz
www.ecodesignadvisor.org.nz
www.iisbe.org
www.nzgbc.org.nz
The value of forward thinking
We cannot afford to create new buildings that become
obsolete within a matter of decades.
A forward-thinking design process is essential to
achieving a successful long-term result.
Architecturally, almost anything is possible. A vast
array of products and technologies await your quest
to create the perfect home. Given open discussion
with your design team, the brief will further tighten
to express your needs and expectations. Site-specifi c
analysis around topography, climatic issues and use
of proven technology will ensure your home provides
energy effi cient, low cost comfort all year round.
David PontingDesigner and Director of Ponting Fitzgerald (www.pfa.nz). Article originally appeared in the 2013 edition of the Design Guide (www.designguide.co.nz).
THE BUSINESS OF BUILDING ISSUE 1 :1830
• You need to eat.
• It’s noisier in the mornings.
• Architects don’t know how much it costs to build –
Quantity Surveyors do.
• How much time is spent on Health & Safety compliance.
• How to compete against cowboys who cut corners. We
don’t and we’re not the cheapest as a result.
• A lot of clients will take the cheapest without realising
that it’s because their builders are going to cut corners.
• The ‘5-minute job’ many clients think exists, is not a
thing. It’s never 5 minutes. And it’s never cheap.
• Young guys setting themselves up in business often
forget to price things like quoting and compliance and
business costs into their jobs.
• It takes me around 120 hours to quote a standard
job. That’s three weeks full time work just to price
something up.
• Coming out of the ground is hard, dirty work. That’s
pretty much the hardest part.
• Demolition work is hard, dirty work, too. That’s the
other hard part.
NO ONE TELLS YOU… BEING A BUILDER Mark Graham speaks to Brendon Murphy
• Food is important!
• The client always wants to move stuff. Often after it’s
installed. And then they wonder why the build goes
over budget.
• Clients always change their mind.
• There is no such thing as a straight forward job.
• Steel cap boots are important!
• At the end of each day, you’re tired. Really tired. But
you know you’ve done a day’s work. You can see your
progress.
• Clients often pay late. They don’t understand that
you’re paying for materials all the time, and subbies and
more. Cashfl ow for builders can be a real danger.
• It’s not always 7-4, fi ve days a week. Especially leading
up to Christmas.
• Everyone wants to be in by Christmas, even when
they’re heading off to their bach.
• Workplace romances are something you read about.
• Insurance is essential and expensive.
• Everyone wants to be a builder in the summer. And no
one wants to be a builder in the winter.
…and is available across New Zealand.
It looks like wood but offers a range of additional features making Futurewood
great value for money…
100% RECYCLED COMPOSITE DECKING WITH 100% REPLACEMENT WARRANTY OVER 15 YEARS
Our composite decking provides an improved performance over traditional hardwoods in most applications and helps to reduce our dependence on precious timber species.
For a free sample pack and/or further information, please call +64 0800 88 88 42, email [email protected]
or visit our website www.futurewood.nz
At Futurewood we are dedicated to providing you with stylish, quality, low maintenance and value added alternatives to traditional timber products.
ISSUE 1 :18 THE BUSINESS OF BUILDING 31
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Some other things to bear in mind when quoting...
Alternative methods and materials should be sought after. Remember you can always quote or tender against the competition, but an alternative solution focused on giving a better solution to the customer is yours alone.
Be proud of your past project achievements and tell prospective clients about them. The more credible you are, the more likely clients will want to do business with you.
There is always someone who may ‘need’ the job more than you do and they may submit a rockbottom price for the job. Don’t be tempted to simply match their price. Remember, the best price must stand the test:
Is the measure correct?
Are the rates for work correct?
Is the specifi cation correct?
Have special circumstances been allowed for?
Is the arithmetic correct?
Remember: A ‘no’ to any of these questions will only cost you money.
While clients may state they intend to select the lowest quote, when presented with a range of quotes, many clients will actually select based on the best solution. This may be the most expensive or the cheapest quote, but will depend on how well individual contractors have demonstrated the value that the customer will get for the price they have quoted.
Well respected contractors are often in demand and may be able to easily command premium rates. Many customers are willing to pay more for the assurance of getting a quality fi nish fi rst time - credibility, reliability and quality work may be their prime considerations with price a distant consideration.
Get a superb finish on your decorating projects with quality Resene paint, colour, wallpaper, curtains, decorating accessories. Come in and see the team at your local Resene ColorShop and enjoy the Resene difference today.
Call 0800 RESENE (737 363) or visit www.resene.co.nz for your nearest Resene ColorShop. Over 60 Resene ColorShops nationwide.
Resene paint quote checklist:
You must know the costs of doing the work. ssenisub ruoy gninnur fo stsoc eht rof wolla tsum uoY
(overheads) as well as some profi t for yourself.
,noitadommocca ,gnillevart ,)gnidloffacs( thgieh rof ecnawolla reporP permits, working hours to suit your client, expected weather conditions (painting when it is hot or cold). These all cost money.
It is easy to leave out a page of workings. Always double check everything before submitting your quote.
Is the proposed scope of work enough to properly carry out. Is the preparation properly specifi ed.
Remember: You are the expert and your advice is valuable if there is a better way for the client to achieve the result they desire.
Use a system so you can easily check your quantities. Make sure everything requiring painting is allowed for.
quality
paint
colour
advice
wallpaper
curtains
THE BUSINESS OF BUILDING ISSUE 1 :1832 THE BUSINESS OF BUILDING ISSUE 1 :1832
1. Only about 10% of your time will
be spent actually sketching and
conceptualising buildings.
2. The amount of paperwork is huge.
3. Knowing how buildings are actually
built is a really valuable thing.
4. Having good relationships with your
clients is really important as to whether
a project will be successful, and is
defi nitely critical as to whether the
project will be enjoyable or not.
5. Just how many options there are for
different parts of a house – cladding,
roofi ng, framing, insulation, fl ooring…
even different types of timber
fl ooring… even different types of
hardwood fl ooring vs different types
of engineered timber fl ooring – the
number of products is enormous and
every day there are new products
coming out and people trying to get
you to use those products.
6. So much of what you do is a
compromise and/or a collaboration. It’s
rare that you get to do everything you
want to, but…
7. …working with a good client who can visualise what you’re
trying to achieve can be incredibly rewarding.
8. How many constraints there are when you come to design
something – budget, building envelope (how high you can
go, how big it can be, etc.), budget, design preferences,
budget…
9. How incredibly satisfying it is when you walk in through the
door of a completed project.
10. Learn project management: As an architecture student, one
of the fi rst things you fi nd out (and last things you learn
to fi gure in) is that everything will likely take three to fi ve
times longer than you expected. This is also unfortunately
common in practice and generally Architects need to be
better managers. I believe this is because architecture is
both a qualitative and quantitative process which helps to
negate the ‘fi nish’ line. Not ever did I feel a design project
NO ONE TELLS YOU…BEING AN ARCHITECT was ‘perfect’ and likewise Architects on every project wish
they had done something (or many things) differently.
“Parkinson’s Law dictates that a task will swell in (perceived)
importance and complexity in relation to the time allotted
for its completion.”- Tim Ferriss, The Four Hour Work week.
Understanding the perceived importance of a given task will
effectively allow you to direct your focus on the right things,
at the right time, allowing you to make smart decisions on
where to spend your effort, time, money, resources and so
on for maximum gain. For more guidance on study hacks
With input from Paul Somerford, Director Brown Day Group (www.brownday.co.nz) and additional insights from Michael Riscica of Young Architect (youngarchitect.com) and Randy Deutsch, Clinical Associate Professor, Associate Director for Graduate Studies at the University of Illinois.
and optimising the use of your time check out Cal Newport’s
blog and 99U.
11. If you want to see your designs built, then you will spend
time designing your buildings in such a way that they are
buildable. Make the ability to put buildings together on equal
terms with the ability to design. Otherwise, you’ll be a paper
or digital architect. But not an architect who builds.
12. You can open an offi ce without any clients. One of the gifts
of being an emerging professional is that you don’t know
enough – haven’t been around enough – to be scared away
from doing unwise things.
Like opening an offi ce with no clients.
But call it naïve or fearless, I opened my fi rm without any
clients. And by the end of day one I had three.
How? By putting myself out there. Before launch, I
ISSUE 1 :18 THE BUSINESS OF BUILDING 33
For Builders Who Want To Be Better www.bobforbuilders.co.nz
ISSUE 1 :18 THE BUSINESS OF BUILDING 33
For Builders Who Want To Be Better www.bobforbuilders.co.nz
hired a graphic designer and designed professional
looking letterhead and an announcement, and sent the
announcement out to everyone I knew.
I got out of my offi ce and, wouldn’t you know, while putting
gas in my car, I heard a voice – a former client who, having
received one of my announcements, asked if I would be
interested in doing some work for him?
It’s all about putting yourself out there. You’ll fi nd if you put
yourself out there, people will meet you halfway.
14. The inglorious moments of working long and hard, being
challenged by contractors, plans examiners, and diffi cult
clients, will far outnumber the moments when you look cool
for being an Architect.
15. Many architects don’t start seeing decent money until
after they become somewhat experienced, licensed, and
accomplished. This generally takes 5-10 years out of college.
16. YOU NEED MATH. Or you need to be able to work at it until
you’re okay or you have good people around you who are.
13. Being an architect is the best job in the
world. Think of it like this; You are given
so many days on this planet, how do you
want to go about spending them? I can
think of no greater way to live on our
planet than to have a position where you
can act on it, change it, grow it, improve it.
17. Architecture is about people.
You’re designing buildings for
people to use. People are
paying you. People will
build them for you.
THE BUSINESS OF BUILDING ISSUE 1 :1834
Because for all their strengths, today’s robots face
some issues…
• Building sites are pristine environments.
Building sites are all different, so for true automation, they’d
have to fi gure out where they are and what they’re supposed
to be doing. Robots were originally developed for use in
factories. Mostly they operate in highly controlled, clean,
clutter-free environments, most often without humans in
close proximity. A building site is another matter altogether.
First of all, each site is laid out differently, so a robot would
have to be intelligent enough to recognise where it is on the
site and then move to the right location. Secondly, building
sites are often chaotic, disorganised spaces with materials,
tools, debris, and wires spread about. Many areas of the
Imagine a robot that can not only tear a building down, but also recycle it. Imagine a building 3D printed using a glue-type cement, built by a robot working 24/7 with no lunch breaks, no toilet breaks and no arm breaks.
DEMOLITION (AND CONSTRUCTION) BY ROBOTS
Speculation is rife of a pending replacement of humans
doing things by robots doing them instead. There’s no
doubt robots are on their way, and they may yet prove
to be more Cyberdine Terminator than C3PO. But as
robots become more developed and more common,
robot engineers are bumping up against limitations…
Robots do have a few advantages over human
workers:
• They’re precise.
• They don’t need sleep or food breaks.
• They don’t sleep in, they don’t drink or do drugs, there are
no mistakes, no time-off, no slacking, no injuries, no health
and safety concerns, and they don’t fi ght with co-workers
(or have affairs with them).
• They could work in spaces that are unsafe for humans,
including small, airless rooms or on the sides of large
buildings with no fear.
• They don’t get paid.
Several companies are working on bricklaying robots,
including Construction Robotics in the US, with a unit
called semi-autonomous mason (SAM), and Fastbrick
Robotics in Australia. They lay bricks straight (or not, if
that’s what’s programmed); they’re accurate, fast and
tireless. But they’re not quite here, yet.
Or self-replicating building ‘cells’ that grow into a building
following a set ‘DNA’. It’s coming (though maybe not
quite yet)!
By Mark Graham
… c o n t i n u e d o v e r l e a f
ISSUE 1 :18 THE BUSINESS OF BUILDING 35
For Builders Who Want To Be Better www.bobforbuilders.co.nz For Builders WhoWho WanWant Tot To BeBe BettBetteer www.www bobfbobforbuorbuildeilders.co.nz
ISISISSSSUSSUSSUSUSS E 1 E 1E 1 1 E 1E :18:1818:18:18:188 THTHTHE THE THE THETHTTT BUSIBUSIBUSIBUSBUSBUUSUSIUSIUBUUSUSIBUUSUS NESSNESNESNESENESSSSSSSSSSSNESSSNESESSNESSSNESSN SSNESES OOOOOFOFFF FFFOF FF BUBUBUILUILUILBUILBBBUBUBUILLBU DDINGDIDINGGGGDINGDDINGGGG 353535353535535333353333
CLASSIC APPEAL OF
Linea™
MODERN ARCHITECTURAL LOOK OF
stria™
JAMES HARDIE CLADDING. BRINGING IT ALL TOGETHER.
“We bought this section for a bach, but loved it so much we decided to build our dream home. Our designers recommended James Hardie cladding to bring together everything on our wish list. The classic look of Linea™ Weatherboard and the wide, vertical lines of Stria™ Cladding provided contrast and an eye-catching, modern look. It's also made to stand up to the extreme conditions here really well. All up, this house has turned out better than we had ever dreamed!”
To see Leonie & Phil’s full story, visit jameshardie.co.nz
JAH0JAH0AH0H0025F025F025F5 PBOBPBOBO
©2017 Copyright James Hardie New Zealand. ™ and ® denotes trademarks and registered marks owned by James Hardie Technology Ltd.
THE BUSINESS OF BUILDING ISSUE 1 :1836 THE BUSINESS OF F BUILBUILDINGDINGDINGINGNGG ISSUISSUIS E 1EE 1 E 1E 11E :18:1:18181888188: 8
There is no "master architect" or "project manager" in
anthills. Each ant repeatedly adds material, following a
very clear set of rules, and the anthill emerges from the
collective efforts of the entire swarm of ants.
If we look at human cells, the information or blueprint
to construct the cell is embedded within the structure
of the cell, in the DNA. This enables the cells to make
copies of themselves. It may be possible to develop
building components that have some built-in geometry
that allows them to link together to form buildings in a
number of different ways, and perhaps allow humans
to program them to link together two or three different
ways, thereby allowing a variety of structures from
the same module. In this approach, the robot does not
build the structure, but is the structure, as the building
is built of thousands of identical mini-robots.
DEMOLITION (ONE OF THE DIRTIEST AND HARDEST
PARTS OF BUILDING)
By mechanising the hard and dirty work of demolition
(and even recycling), large building projects would
go much faster, and they would also likely become
cheaper and safer too.
This robotics proposal comes from Swedish student
designer Omer Haciomeroglu, who says that his
concept – named ERO - is a smart recycling robot like
the Disney/Pixar WALL-E.
He states that ERO could ‘effi ciently disassemble
concrete structures without any waste, dust or
separation, and enable reclaimed building materials to
be reused for new prefabricated concrete buildings.’
In other words, it could be a dream come true for the
construction sector.
In concept, it uses high-powered water jets to crack
the concrete, and the cement and water are then
sucked up and separated. The water is recycled back
into the system, while clean aggregate is packed
and sent to concrete precast stations for reuse. The
reinforcing steel can then be cleaned and cut on the
spot for reuse, as well.
A fl eet of ERO robots working together would be able
to scan the area and plan their demolition/recycling.
The robots could literally ‘erase a building.’
Robots are coming, of that there’s no doubt, but
humans are going to be needed for a while yet,
especially with the current construction boom
going on.
Mark GrahamPublisher of the Building Guide, Design Guide and BoB for builders.
www.buildingguide.co.nz | www.designguide.co.nz
site will have unpaved soft soil, into which a robot will sink
if it steps off the beaten path. There will be dust, rain, ice,
and storms. There will be humans walking around. Getting a
robot to work in these conditions is very diffi cult.
• Buildings nowadays are complex entities, and construction
entails many different trades coming together to work in
perfect sync with each other. The robots that we’re seeing
now each perform one specialised task. It is impossible for a
bricklaying robot to perform delicate tasks such as installing
electrical cabling. Human dexterity, intelligence and
situational awareness, developed over hundreds of millions
of years, is currently far superior. Services like power cables,
data and information cables of many kinds (voice, security,
fi re alarm, BMS) have to be woven through the fabric of the
building. So, a robo-mason must also be able to lay conduits
for electrical wires, plumbing pipes, and must be able to
perform waterproofi ng tasks. That’s way beyond what can
be done right now.
SO HOW LONG BEFORE BUILDINGS ARE MADE BY
ROBOTS?
Robots need to become a lot smarter – a 'general
intelligence' and awareness, and that implies an
awareness of ‘self’, too (self-aware robots – nothing
to worry about here). This could be 20 years. At the
moment, the robots are really just better tools.
WHAT ABOUT BUILDINGS THAT CAN MAKE
THEMSELVES?
New technology often means doing things in new ways
that hadn’t previously been considered. Rather than
have someone (or thing) build a house, what if the
house built itself? Or rather than one big robot, what
if lots of small robots, each doing a specifi c thing over
and over, and coordinated with its ‘co-workers’, ‘grew’
a house?
These concepts are not new to science-fi ction readers.
ISSUE 1 :18 THE BUSINESS OF BUILDING 37
For Builders Who Want To Be Better www.bobforbuilders.co.nz
The Fundamentals of House Design inNew Zealand and around the World
Visionary Architecture for Modern Living
ISSUE#9 IN
STORES NOW
Please refer to our website for stockists www.designguide.co.nz
THE BUSINESS OF BUILDING ISSUE 1 :1838
I wanted to help other home owners going through
that process – we found that the more we learnt the
better the build went.
As it happens, every report I've read since that looks
for ways to improve productivity and effi ciency in the
building industry has identifi ed client education as
being a critical factor. The traditional view that clients
having a little bit of knowledge is a dangerous thing
is consistently shown to be the reverse.
The latest BRANZ report: New House
Owners’ Satisfaction Survey 2016 clearly
shows a higher degree of satisfaction
with the outcome of their building project
from people who have built before,
compared to fi rst time housebuilders.
It stands to reason, if a client understands
at least a portion of all the elements that
go into building a house there will be
greater tolerance for the complications that always
arise in a building project.
Twelve years on, I continue to be disappointed at
an industry attitude that sees client education as a
"nice-to-have" rather than an essential for the industry
to improve outcomes and productivity. With the
exception of New Zealand Certifi ed Builders, none
ALAN’S RANT
of the major industry
associations support
the Building Guide or
undertake any consumer
education programmes beyond promoting their own
membership base.
Facebook posts and blogs are not suffi cient in
our view to adequately address client ignorance
around building.
Now the country is about to undertake a major state
housing building programme. The client in this case
will be the New Zealand government and, indirectly,
New Zealand citizens. Our greatest
concern, especially given the fi asco
of the leaky home crisis and the more
recent Christchurch rebuild issues
that we identifi ed in our last edition of
BoB, will be in ensuring that the new
programme will have a robust quality
assurance component in place.
While the thought of built-in
obsolescence to ensure the building
industry has ongoing work has some attraction,
we'd prefer that we ‘built it right’ the fi rst time so we
don't have to come back and rebuild them over and
over again.
To this end it would be nice to think that the industry
organisations, who are seen as the natural leaders
of the industry, work with MBIE and the KiwiBuild
programme to focus on quality outputs rather than
just ensuring work for their members.
I started publishing the Building Guide almost twelve years
ago because I came out of a major renovation and extension to
our house having learnt a huge amount, not least was how little
I knew about building.
THE PRICE OF NOT EDUCATING HOME OWNERSGuest writer – Mark Graham, BoB publisher
…the more
we learnt the
better the
build…
ISSUE 1 :18 THE BUSINESS OF BUILDING 39
For Builders Who Want To Be Better www.bobforbuilders.co.nz
PRESCRIBED CHECKLIST
About this checklist
A building contractor is required to provide you with this checklist and other prescribed information under the Building Act 2004 before you sign a contract for the building work if -
(a) you request this checklist and the prescribed disclosure information; or
(b) the building work is going to cost $30,000 or more (including GST).
The building contractor is the person or company you have asked to do building work for you.
The building contractor may not be an actual builder. The building contractor could be a plumber, an electrician, or any other tradesperson who is doing some building work for you and whom you are dealing with directly.
Steps (See notes below)
Completed (Tick when completed)
1 Become informed
2 Agree on project structure and management
3 Hire competent building contractors
4 Agree on price and payments
5 Have a written contract
6 Take control
7 Resolving disputes
Notes
Step 1 – Become informedAll building work must comply with the provisions of the Building Act 2004. You can find a copy of the Building Act 2004 on the New Zealand Legislation website: www.legislation.govt.nz
Building work is any work done in relation to the construction or alteration of a building. This includes any work done on your home or other structure, such as a garage, retaining walls, and fences. It also includes work like painting, decorating, and landscaping if it is part of the construction or alteration of a building.
However, if the only work you are getting done is redecorating and there is no construction or alteration work involved, it is not building work. If landscaping work does not include any structures (eg, pergolas or retaining walls), it is also not building work.
All building work requires a building consent unless it is exempt under the Building Act 2004.
Generally, only simple or low-risk work is exempt from the requirement to have a building consent. Certain gas and electrical work is also exempt. For more information, go to www.mbie.govt.nz
Building work that is significant or of higher risk (such as structural alterations) requires a building consent and must be carried out or supervised by a licensed building practitioner. For more information on these requirements, go to www.mbie.govt.nz
Step 2 – Agree on project structure and managementBuilding projects do not run themselves. Decide how you want to manage the building project.
A few different roles are needed on a building project. You need someone to -
• manage timelines and costs:
• manage subcontractors:
• liaise with the local council:
• make decisions about the design of the work.
You can do some of this yourself, but if you are not knowledgeable about the building work process, you should get help from an architect, an independent project manager, a building company, or a licensed building practitioner who is licensed to co-ordinate the building work involved.
You should be really clear about the scope and size of the project and get detailed plans up front.
Be clear with your building contractor about who is doing the building work and who is responsible for making design and change decisions during the project.
It is m
an
dato
ry t
o h
an
d t
his
ou
t to
yo
ur
clie
nts
fo
r w
ork
ove
r $
30
,00
0 o
r if
th
ey
re
qu
est
it.
THE BUSINESS OF BUILDING ISSUE 1 :1840
Step 3 - Hire competent building contractorsEnsure that your building contractor has the skills and resources to carry out the project.
You should -
• ask around about the building contractor and get references for other work that the building contractor has done:
• find out if the building contractor is a licensed building practitioner or has other appropriate qualifications. For more information about licensed building practitioners, go to www.mbie.govt.nz
• determine whether the building contractor has sufficient insurance to cover the work while it is being carried out:
• ask about the building contractor’s employees and what subcontractors the building contractor will use on the project:
• if the building contractor is a company, look up its company records on the Companies Office’s Internet site. If your search raises concerns, ask the building contractor to explain.
Step 4– Agree on price and paymentsThe contract should clearly state what payments are required and when. Where possible, a fixed price is preferable. The lowest price is not always the best price.
You should -
• get detailed quotes (not estimates) for the building work:
• when comparing quotes, ensure that the scope of the building work and the materials and fixtures that you are comparing are the same across quotes so that you are “comparing apples with apples”:
• make sure you have the funds to pay for the project before the work begins and that you understand the payment terms agreed with the building contractor:
• think carefully before agreeing to pay more than the cost of the work that has been completed and the costs of any materials that have been supplied at the time you make the payment.
Step 5 - Have a written contractYou should have a written contract. The contract should include items such as -
• a description of the building work:
• the start and completion dates for the building work:
• how variations to the building work will be agreed:
• the payment process, including dates or stages for payment and how payments will be invoiced, made and receipted:
• the dispute resolution processes to be followed.
You should obtain legal advice to ensure that you understand your rights and obligations and that the contract complies with all legal requirements.
Note: The Building Act 2004 requires that there must be a written contract for residential building work with a value of $30,000 or more (including GST), and the Building (Residential Consumer Rights and Remedies) Regulations 2014 prescribe matters that must be included in every contract for residential building work with a value of $30,000 or more. You can find a copy of the Building Act 2004 and the Building (Residential Consumer Rights and Remedies) Regulations 2014 on the New Zealand Legislation website: www.legislation.govt.nz
Step 6 - Take controlAll residential building work is covered by implied warranties prescribed by the Building Act 2004 that address matters such as workmanship and building work being fit for purpose. For more information, go to www.mbie.govt.nz
You should -
• make sure there is a clear line of communication with the building contractor through the site foreman, the project manager, or any other person who has authority to speak on behalf of the building contractor. (This person should be identified as the “key contact person” in the prescribed disclosure information that the building contractor has provided along with this checklist):
• when you are making decisions along the way, be clear as to whether those decisions will affect your contract and costs. If you do decide to make a change, keep track of the effect of that change.
Step 7 - Resolving disputesIt is in both your interests and the building contractor’s interests to keep the building project running smoothly and to deal with any disputes as they arise.
If you have concerns about the building project, raise them with the building contractor (or the key contact person) as soon as possible.
Raise your concerns in good faith and use the dispute resolution processes agreed to in your contract. For information on your options, go to www.mbie.govt.nz
If you have received an invoice that you have concerns about, clearly outline your concerns to the building contractor in writing.
If you fail to make a payment when it is due, the building contractor might start dispute resolution proceedings before you have a chance to explain why you have not paid. (Simply withholding payment when there is a dispute will often make the situation worse.)
Further informationFor more information, go to www.mbie.govt.nz or call the Ministry of Business, Innovation, and Employment on 0800 242 243.
ISSUE 1 :18 THE BUSINESS OF BUILDING 41
For Builders Who Want To Be Better www.bobforbuilders.co.nz
Like us on Facebook key word buildingguide
CHECK OUT SECTION 6.3
FOR COMPREHENSIVE
LISTINGS OF QUALIFIED
BUILDERS IN YOUR AREA
YOUR BUILDINGPROJECT WORKBOOK
WWW.BUILDINGGUIDE.CO.NZ
AUCKLAND | SUMMER AUTUMN 2017/18 BI-ANNUAL
Follow us on Twitter Follow us on Pinterest
2017 BI-ANNUAL $6.95
ORDER BY EMAILING [email protected]
INCLUDES THE MANDATORY PRESCRIBED CHECKLIST
EXPLAINS THE PROCESSES OF BUILDING TO YOUR
CLIENT SO YOU DON’T HAVE TO
IS YOUR BEST FRIEND FOR EDUCATING YOUR CLIENT
A REGIONAL BUILDING GUIDE THAT...
This is a trade quality saw stool and a builder’s best mate. This product is compliant and has a load rating certi cate. We also offer a lifetime warranty on all alloy components. It is very robust and will stand up to the demands of the building industry. The stool collapses down to a very compact unit, which is very convenient for storage and transportation. The base and legs made of aluminum so are maintenance free. The timber top is attached with tek screws and easily replaced as required.
Designed and Manufactured
in New ZealandPatent #612150
SAFEWORK
LOAD RATING 350KG
A BUILDERS BEST MATE
WEB www.sawstool.co.nz EMAIL [email protected] PHONE 027 4343 797