Jun 06 2017

The Myth of Square Metre Rates

Measuring the cost of a home by the cost per square metre is not a reliable, nor helpful measurement. Why is that? There are numerous variables that come into play with a new home. These mean that judging it by a square metre rate is not always an accurate reflection of what’s inside.


According to a 2016 article on Interest.co.nz, “Twenty five years ago, the cost to build was $687 per square metre. By 2006, that had risen to $1,096 per square metre. Today, that national average level has risen to almost $1,800 per square metre.” Keep in mind that those are averages. That means they cover homes that are done up to the nines as well as those done on a budget. A higher square metre rate may reflect a smaller house with high-quality finishes. It might reflect an $80K kitchen or the most expensive cladding available.


Consider two homes, both 100 square metres in area. Home A measures 10m long by 10m wide. Home B measures 50m long by 2m wide. Both of these are the same area but the construction of one will vary vastly compared to the other. The total length of all external walls is 40m for Home A but the external walls add up to 104m for Home B! Yes, these figures are exaggerated but it highlights the principle that the cost per square metre for a house is not a relevant measurement. The shape, the number of corners, the number of plumbing fixtures, the style of kitchen – these things all have a dis-proportionate impact on the rate (especially when it comes to compact homes!) where it is rendered irrelevant as a useful measurement to compare.


The point is that shopping for a new home using this metric will not make it simple for you to choose. It’s always true that you get what you pay for. Looking for the lowest square metre rate could put you onto a low-quality builder.


Now consider buying a laptop. Side-by-side, you might see two identical-looking laptops but you might find that one is twice the price of the other. Because it all depends on the specifications.

If you are stuck on using square metre rates to compare your potential homes, keep this in mind:

  • Timing has an affect – as highlighted, building costs change on a regular basis so if you are looking at pricing but not planning to build for a year, there will be a different rate by the time you build. (And, if we are to believe the New Zealand Herald, one forecaster they interviewed believes costs will go up 5.2% per annum over the three years to March 2019!)

  • Be sure you’re comparing equal houses – yes they might have the same number of bathrooms and bedrooms, but ensure that you know where the differences are so that you can take that into account with the price.

  • Are you looking at non-standard homes? A kitset house or a package from a builder may quote the lowest cost per metre but if you are making changes, remember that affects the square metre cost. When building with Manor Build, you can customise your layout and finishes, which doesn’t compare to a stock-standard kitset package.

  • Ensure that all permits, taxes, etc. are included in advertised square metre rates – If the costs are not transparent, make sure you read the small print to find out what is and what is not included.

We believe it’s most important to look at the total cost of your build to fit your budget. When you have the flexibility that Manor Build gives you in layout and design options, you can be sure that you’re getting the most for your money. Check out our floor plans and give us a call to discuss how it can be made to fit your family.