More Cost Advice for Homeowners
NZIQS - 18 October 2011
Canterbury homeowners considering insurance offers to support a rebuild or replacement of their Earthquake-damaged homes. You need to consider the following issues.
What type of house are you replacing? If the insurers offer relates to a price per m2, below are some very general guideline costing figures;
$1100 per m2 to $1400 (incl. GST) per m2 range reflects “group housing company” type rates for a simple single storey off-the-shelf design house on a flat site with standard foundation design;
$1800 to $2600/m2 (incl. GST) relates to the cost of designing and constructing a one-off design single storey home to a good standard.
$2600 to $5000/m2 (incl. GST) would be the typical costs for an executive level designed and finished house of substantial construction, typically multi-storey or multi-level in the hill suburbs, and dependant on fixtures, fittings, and finishes.
Payouts by insurers for destroyed homes replaced on the same site need to cover the costs of any likely additional in-ground structural requirements, and the engineering design costs associated with structural foundation work .
Make sure you have an undertaking from your insurers that they will insure your new home when built. Better still arrange replacement insurance on the new home before commencing construction. Most lenders will require this before entering into any lending arrangement.
Replacement insurance covers the cost of rebuilding to the completion of construction, so needs to include;
- design costs,
- Construction costs inflation over the period to completion of construction,
- increased costs to meet the new earthquake design standards for Christchurch, and
- Costs of meeting the current Building Code requirements, such as for all treated framing, insulation, and double glazing,
- costs for special foundations or piles or large compacted hard fill rafts that may be required to overcome site specific ground conditions.
Note - construction industry costs in Christchurch are likely to escalate significantly over the next 2/3 years due to reduced competition, shortage of some skills and professions, increasing labour charge out rates, reduced discounting by material suppliers and increasing profit margins across the market following a very lean period.
Quantity Surveyors are specialists in assessing construction costs related to building or repairs. However, it is also a profession with only a limited number of professionals who undertake work on residential homes. There is frequently a shortage of qualified and experienced professionals in NZ. If a homeowner employs a Quantity Surveyor they will need to meet the charges for their services, as the insurers are most unlikely to meet the costs of challenging their assessments of repair or replacement costs.
For peace of mind, homeowners who have significant concerns about their house replacement offers should consider seeking professional costing advice from a suitably qualified Quantity Surveyor who can assess the repair costs or current replacement value which will include the costs mentioned above and architectural, structural, geotechnical design costs, special foundation costs, future cost escalation, landscaping and driveway costs.
For professional help try a Registered Quantity Surveyor (RegQS) TM (see www.nziqs.co.nz/ ) or a qualified Quantity Surveyor recognised by MNZIQS TM, ANZIQS TM, FNZIQS TM (see your Yellow pages).
NZIQS and Cost Advice - update for Canterbury Earthquake Victims
14 September 2010
There are cowboys (and probably cowgirls!) and opportunists in every trade and profession. An important element in the process of remedial work, rebuilding or building new is certainty in the cost for the client, banker and insurer. People should not be hasty to make decisions bad decisions may be hard to recover from. Take time and make sure that you increase the certainty of good work with less risk and without unexpected costs. Engage suitably qualified people at every step of the process e.g. IPENZ and NZIA members, Master Builders, Certified Builders and others belonging to a recognised organisation. See Construction Industry Council for a suitable list of reputable organisations.
For claims by residential homeowners to EQC contact the proper authorities
Earthquake Government Helpline : 0800 77 99 97, Earthquake Commission: 0800 DAMAGE (0800 32 62 43 )
You will find available some proper advice such as Householders' Guide to EQCover and A Guide to Making A Claim. If you have any queries about your claim or the cover provided by the Act contact EQC at firstname.lastname@example.org
When EQC payment has been authorised (for residential homeowners only) the remaining cost to the building owner needs to carefully established. An expert (architect, engineer, etc) will need to establish the scope of work for repair or rebuilding. Then if the cost is significant to the client, increased certainty or a peer review of any estimates that have been provided can be obtained by engaging a qualified quantity surveyor/cost consultant. The estimate of cost is only be as accurate as the information given in the scope of building work needed.
NZIQS qualified members are identified by MNZIQS, ANZIQS, and FNZIQS. Some members are also Registered Quantity Surveyors (RegQS), which marks that the member is accredited with maintaining an internationally benchmarked continuing professional development programme and has gained additional recognition following work experience assessment. Registered QSs and some QS firms are listed at www.nziqs.co.nz . NZIQS members operate under a Professional Code of Conduct and Professional Practice. If your cost consultant does not have NZIQS qualifications make sure that you are convinced of the credentials of your cost adviser. It is valuable to confirm your consultants are covered by professional indemnity insurance.
Although you may be in a hurry to return to normality, time spent in reducing risk and increasing certainty of the cost and outcome at the initial stages and before starting work is NEVER Wasted.
See http://www.christchurchquakemap.co.nz/ for visual image of the Canterbury quakes and http://www.youtube.com/watch?v=Npqx3WmNkv4 for GNS flyover of the fault.