Milestone Homes recently built its 200th house, representing on average 100 houses per year or around eight and a half houses per month during the two years the company has been in operation.
This is an achievement to be proud of, considering the slow New Zealand economy during the past 24 months, Milestone Homes general manager Stephen Murray says.
Milestone Homes has been part of the Jennian Homes family since 2006. It focuses on the $150,000 to $270,000 market segment. This is the entry level to the property market for many home owners, as well as a popular niche for retirees and property investors.
In late 2008 Jennian took the strategic decision to market it as a separate brand. Mr Murray says by January next year Milestone Homes will be a stand-alone franchise, with 30 businesses operating from Kerikeri to Invercargill.
“We know for many New Zealanders building a home is a big step — a milestone in fact — so we do everything we can to make it easier for them to reach.
“With Milestone Homes as a separate franchise, we can service its market better,” he says.
Customer is king
Mr Murray says Milestone is successful because it knows what its market wants and ensures these needs are met.
The company has 60 modern, proven house designs created by an in-house draughting and estimating team.
The company plans to increase the number of plans to 70 by early 2010. The new plans incorporate more optimised, double-level space structures to accommodate the growing trend of building on minimum sized subdivided sections.
“What Milestone means for the home buyer is we’ve put careful thought into every single aspect of each home design, so that our homes are affordable, comfortable, durable and practical.
“We build with the best materials available, sourced from our reputable industry partners.”
Milestone homes are constructed from Monier Brick or James Hardie weatherboard with Gerard metal roof tiles for low maintenance. Other premier building suppliers the company uses include Carters, Pink Batts, Norman Ellison and Plumbing World.”
“Our standardised designs and long-standing relationship with our suppliers, partners, and tradesmen enable us to negotiate great rates we can pass on to our customers,” Mr Murray says.
Big enough market for all builders, but . . .
Mr Murray says another reason why Milestone prospered and grew through the recent recession is the way the group manages boom and bust cycles within the industry.
He says the New Zealand construction industry has a $12 billion annual turnover, so housing needs grow by the day, and the industry needs strong brands such as Milestone to service the market.
He believes managing the cycle on a national level revolves around access to money and quality land for buyers, fiscal discipline by and access to a steady labour force for builders, and consolidation of red tape.
“Banks have been very good with reducing interest rates, but buyers’ access to mortgages and, in particular, the historical issue of saving up a deposit before the next price hike, remain a problem.
“Developers tend to hold on to quality land, waiting for an upturn. However, the upturn will only happen when we start building again and, without land, we cannot,” he says.
Fiscal discipline crucial
Fiscal discipline by builders is crucial. “Many builders are undercapitalised and basically trading insolvent. Some go under, leave an owner with an unfinished building, then appear again a few months later. This destroys consumer confidence.”
Mr Murray says society and, in particular, schools should continue to encourage youngsters to consider the construction industry as a solid career choice.
“We’re in the process of creating a gap in the market right now, and losing apprentices. But before long we’ll be back in a boom situation and then we’ll face critical labour shortages again.”
Different councils have different procedures to process plans and deal with issues, which creates a lot of unnecessary red tape.
“The Government must take a leadership role to address these issues to even out the boom and bust effect, and ensure sustainability of the industry in the long term,” he says.
Mr Murray expects Milestone Homes to complete its 300th home early next year.