Affordability key driver for new design trends

Affordability key driver for new design trends says Signature Homes

Signature Homes is in the business of building new residential homes. So it will come as no surprise that 2011 has been one of the toughest on record for this 30 year old building company.

Supporting eleven franchisee-operated businesses throughout the country, Signature is one of New Zealand’s biggest turn-key home building operators taking clients from the inquiry stage right through to managing every facet of final construction.

Signature Homes’ CEO, Phillip Howe says, “Putting the industry’s current state into perspective; I joined Signature Homes seven years ago when annual housing starts were 26,000 per year. In 2011, housing starts were hovering around just 13000.”

But Howe is generally upbeat about the house-build future stating that 2011 also marks the year when several interesting new trends started to take hold – trends that in Howe’s opinion will shape the very way Kiwi’s inhabit their homes for the foreseeable future.

“However the big driver on key new trends is ‘affordability.’

Howe says the average price of a New Zealand section has steadily been rising and is now around $160,000. “But what’s really interesting is that in the last five years the average size of our sections has shrunk - so section are more expensive but smaller,” adds Howe.

Due to the average section shrinking from 700 square meters to anywhere between 400 to 500 square meters – the size of our homes is following suit.

Up until recently the average size of our houses was 200 square meters – second only to Canada for the biggest homes in the world.

“We were definitely once a nation of quarter acre sections but affordability has meant we’re now designing smaller homes,” says Phillip Howe.

For Signature Homes this trend has meant revamping its designs – including cutting down on dead space such as hallways and maximizing living areas by adding more open spaces. Moreover, while en suites are still de rigueur, Howe sees these facilities being radically cut down in size from the days when ‘McMansions’ were all the rage.

Another design trend is that requests for that room in the house known as the study or office is on the wane. “In the last 18 months we’ve seen a definite trend to move toward study nooks or spaces with maybe Japanese sliders to section it off,” says Howe.

“The study/office areas once took up 10-12 square meters in a home but with the advent of Wi-Fi, laptops and ipads, Kiwis’ at-home work habits have radically changed and these spaces can be utilized better as part of a more open plan for living.

The other major driver for 2011 is obviously Christchurch.

“2011 has been very hard on the self-employed builder simply because the deluge of work expected due to the Christchurch rebuild has been very slow in coming through”, says Howe.

“Re-insurance issues really slowed this potentially boom market. In fact, we’ve seen much skilled labour simply had to leave the country,” adds Howe.

Signature Homes’ strategy for the past couple of tough years has been simple. “It’s about the quality of our offering but also just as importantly it’s about instilling confidence in prospective clients that they can depend on us to create and deliver them the biggest purchase of their lifetime – their home. Hence we’re finding it’s tangibles like our Home Completion Guarantee which can mean the difference.”

Howe says the company is in very good shape but industry conditions will still be tough for much of 2012. “We are now doing a lot of work with insurance companies and assessors and Christchurch in general is looking very promising. We predict Christchurch 2012 housing starts to increase by a very, very healthy 30%. However, rest of the market will remain in doldrums territory from 5-10% increase on 2011,” says Phillip Howe.

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