Property Investment
3 min read
Author: Andrew Nicol
Managing Director, 20+ Years' Experience Investing In Property, Author & Host
Builders have knocked up rows of townhouses over the last decade.
And some people think they look cheap. Nasty. Cookie-cutter. Especially next to a handcrafted villa.
So, is it true, and did we really build better houses back in the day?
Just before we get into it. My business – Opes Partners – helps people invest in New Builds. So I have an incentive to say, “New Builds are great!”
As always, my commitment to you is to be as honest and unbiased as I can. That way you can make the right decision for you.
50 years ago, building a house was hands-on. Really hands-on.
It was normal to have 6 carpenters on-site for 6+ months, working full-time just to finish a single house.Â
That’s because a builder would do everything. From cutting the door frame to putting on the roof.
Wages were lower, and land was cheaper. So, it didn’t cost as much to make each house unique.
Today, we build houses differently. That’s to get the costs down.
Many house parts are assembled off-site.
Then, you get specialist tradies in to handle plumbing, put the roof on and lay the foundations.
Let me give you one example. In the 1970s, a carpenter built the whole door frame from scratch. They’d screw in the hinges, build the frame, and put it up.
Today, it arrives from the factory ready to slot right into place. It’s cheaper.
Were those doors better back in the day because the builder put the screws in themselves?
Not really.
No one cares who screwed in the hinges. They just want the door to open.
But because everyone did it a bit differently, each door was a little different.
A lot of houses built today have a similar look and feel. It was actually the same back in the 1920s when all those villas were built.
What’s changed is time.
Over the past 100 years, those homes have probably been bought and sold a dozen times.
Each owner has made their mark – added an extension, ripped out a wall, and painted the walls teal in 1993. Then back to white again in 2017.
Old houses only look unique today because they’ve been lived in. Give a New Build 50 years, and it’ll have quirks of its own.
So what about quality? The building code evolves over time, forcing builders to use more robust materials.
And while that standardisation means more properties look similar, it also means that the quality is more consistent.
But one of the main concerns investors often bring up is about the townhouse walls: Are they flimsy and paper-thin?
Those of us who once lived in rows of 1970s units remember listening to our neighbours on either side of the wall.
Yup, it was noisy.
But today, we use different building materials.
To get really specific – most townhouses use aerated concrete walls. These are concrete blocks with tiny bubbles of air.
Sound waves lose energy when they hit air pockets. So these new materials make townhouses quieter.
It's not that New Builds are better or worse than properties we built decades ago.Â
Sure, standards have improved. But the biggest shift is in how we build to be more efficient, cost-effective, and fast.
Could we still build the old-school way? Sure. But you’ll double your costs.
Great if it’s your own home. But, for investors that extra spending doesn’t turn into the same amount of extra rent. So it often isn’t worth it.
I asked my building inspector mate, Kyle Brookland if New Builds are crap. He said 90–95% are solid – only a small number aren’t.
That comes down to the quality of the developer.
We don’t build houses the way we used to. That’s no accident. It’s the whole point.
It’s not that we’re not building houses worse. We’re building them differently.
Managing Director, 20+ Years' Experience Investing In Property, Author & Host
Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.
