National building company Generation Homes Ltd is bucking the trend and continuing to offer a fixed price and guaranteed delivery date for new homes despite the current climate of steadily increasing prices for building materials and supply chain challenges.
Generation Homes’ 24 years of fixed price builds and an extremely efficient build programme underpins this guarantee, Chief Executive Kevin Atkinson says.
“Building efficiency is easily talked about, but it is actually doing it that gives us an advantage,” Mr Atkinson says.
“The differentiating factor of our proven construction system is our build planning process and project management to deliver the house on the agreed date. It is our core deliverable – fixed price on time.
“Sending purchase orders to our suppliers prior to the build starting locks in the price. But you can only do that if you have a well-structured and efficient build programme,” he says.
People are rightly nervous about building a new home at the moment because of the rising costs and difficulty of supply of materials, he says, but there’s reassurance and risk reduction to be had from signing a fixed-price contract.
Fixed-price contracts are available for house and land packages nationwide and also for people who have their own land and wish to build on it, Mr Atkinson says.
The extraordinary circumstances of the current building environment caused Generation Homes to reassess its fixed price and on time delivery promise and the company decided it was important to continue.
“Alongside rising prices, there is also pressure on the supply of building products at the moment. It is a difficult situation, and all other builders are finding it the same, but to date we have managed to deliver homes on time to our customers,” he says.
“Generation Homes has been in business since 1997. Our 24 years of history of providing competitive prices and building on time gives us the confidence to continue to provide fixed-price contracts,” Mr Atkinson says.
A fixed price contract means customers are protected from rising prices during their build process – the price is locked in when the contract is signed and the risk of any rise is removed.
“Fixed-price contracts reduce the risk to the customer and make their bank funding so much easier,” Mr Atkinson says.
The Generation Homes business model revolves around the certainty and reliability of the delivery time.
“Generally, our 16- to 18-week build programme for a single-storey house is shorter than other companies and far more reliable,” Mr Atkinson says.
“We are a higher volume business with long-term national supply relationships. It is a strong position for us to be in and does give us an advantage.”
A crucial factor is customers must lock in the design and products in their new home. People have to be definite in their requirements and stick with their decisions as minimal changes are allowed during construction.
That means once the contract is signed, even if there is a delay for the house start because of title being issued or building consent delays, the price will not change.
Mr Atkinson explains that a supplier will commit to a product price when the order is issued providing they know they have reliability of when that product is going to be picked up, used and paid for.
Generation Homes is exposed to the risk of price rises once contracts are signed, but the team works hard to lock down its supply contract quickly, to book and order the product, and to get the house built as soon as possible.
“We have a very efficient build programme and a 96.7% success rate for delivery on time, so therefore time is not wasted and this reduces our vulnerability to product price increases,” Mr Atkinson says.
Generation Homes is a Tauranga-based company building 400 homes a year around New Zealand. Currently the busiest markets are Auckland, Tauranga and Christchurch.
Please note: Currently delivery on time can be extended due to COVID-19 lockdowns.