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Signature Homes, a leading New Zealand home builder, reports that 2011 has been one of the toughest years in its 28-year history. Even so, the company’s CEO predicts that 2012 won't be as tough as Christchurch insurance cheques are processed and Kiwis opt for smaller dwellings.
Sales of New Pre-Designed Homes Fall
Signature Homes is a leader in NZ’s pre-designed home industry. The company assists clients throughout the entire process of home construction, from the initial exploratory stage through final construction. Phillip Howe, the Signature Homes CEO, reports that annual housing starts were about 26,000 in 2005. That compares with a figure of about 13,000 for 2011.
A general economic downturn plus factors related to the Christchurch earthquake of 2011 – namely, the slow re-insurance issues and the exodus of many skilled labourers – have reduced many home builders’ project loads.
Downsizing a Saving Grace
Despite the poor sales figures for 2011, Howe is optimistic about new pre-designed home sales for 2012. He observes that a new trend – namely, a preference for smaller homes – will help spur growth. “We were definitely once a nation of quarter acre sections,” he said, “but affordability has meant we’re now designing smaller homes.”
According to Howe, so-called McMansions are no longer all the rage. People are realising that such homes are now out of reach, so they’re increasingly willing to downsize. The average section size has fallen from about 700 square metres to 400 or 500 square metres and new home sizes themselves are shrinking.
New Home Sizes, New Designs
Rather than simply offer smaller versions of existing home designs, Signature Homes has responded to customers’ downsizing preferences with cleverly revamped blueprints. One design strategy involves reducing hallway size to maximize living space. Additionally, fewer new homes feature a full-fledged study or office. Instead, homeowners are using freestanding Japanese room dividers to create private work spaces. For many people, this is an easy compromise: As Howe points out, New Zealanders’ in-home workspace requirements have been reduced with the advent of wireless Internet and portable computers.
Signature Homes is also adapting to the new market by emphasising its corporate strengths, such as the Home Completion Guarantee.
Cautious Optimism for 2012
Howe reports that Signature Homes is healthy although industry conditions will be difficult for much of 2012. An exciting 30% projected growth rate for Christchurch will likely be offset by housing increases of just five to ten percent for the rest of the New Zealand market
More information at Signature Homes.