New venture to drive down construction costs

A new business in Christchurch plans to cut the cost of new build homes for developers and buyers, and make it easier for advisers to secure financing.

Wednesday, September 5th 2018, 2:39PM

Chaptr, set up by former Westpac banker John Brophy, plans to help smooth the process of getting a new home built, assisting the financing for developers with money from buyers. The buyer money is secured and guaranteed by Chaptr. The company believes it can drive down the final price of new build homes by $30,000-$40,000, simply by making the process more capital-efficient.

Chaptr acts as a middleman, smoothing the house building process with progress payments and driving down capital requirements. Buyers’ money will be kept safe in a trust, or with a bank guarantee, and home buyers will face no risk of losing their money, Brophy told TMM. “There’s too much risk in the current process that makes houses more expensive than they need to be. With Chaptr, the developer gets a committed buyer, and the whole project moves faster,” he said.

Chaptr launched a few weeks ago. The company is a licensed real estate agent and will also source house and land packages, as well as connecting buyers with developers. The company is already offering house and land packages with developer Silverstream in Canterbury, starting from about $365,000.

The company is planning to talk to more advisers about its proposition in the coming weeks, Brophy told TMM. “Mortgage advisers have a great option to get people into the same house at a lower price. The construction becomes more bankable, and once advisers know about it, they should be excited. Borrowers will need less money and loan servicing is easier to achieve,” he added.

Brophy said the company could play a role in easing New Zealand’s housing shortage. “I just thought there is a better way to do this, I wanted to put my money where my mouth is,” he added.

Tags: property investment