The Eye of the Fish

July 23, 2018

Exit the Matrix

Well that’s really not good news at all. Matrix Homes has folded, when it was just meant to be paused for a bit. News last week was that the company was being put into receivership, over a dispute with Camperdown Studios. That’s a company associated with Peter Jackson – “Camperdown Studios uses half of Matrix Homes’ 8000-square-metre warehouse to store props from Weta films including the Lord of the Rings trilogy.
But this week – down the plughole, and that’s a real shame. I’ve not been to visit Matrix – but they were one of the few places actually trying to make prefabricated housing work, and (I thought) succeeding. They built all their houses in a factory, and then shipped them to site, at prices that were at the low end of low. You supply the land, they’ll supply the house at a reasonable price. Starting at $139,000 – not a price to be sneezed at. I’ve had projects where the earthworks alone were way more than that.
It is particularly bad as there are a bunch of transported houses sitting marooned on the side of a cliff near Tawa – just next to the Countdown supermarket, just above the Railway line into town, and just opposite from the leafy idyll of the Women’s Prison – full of fair maidens batting their eyelids at the sealable homes on the hillside opposite. I’ve been watching this development with interest, as it promised to be a big deal – houses springing up on site and completed within days. I’m not 100% certain that they are Matrix homes, but I am reasonably sure – and I am extremely worried about them being left there.
They need to be put on proper foundations and given their final flashings etc, and moved into pronto – not left marooned in the supermarket carpark. While the site should have been a hotbed of activity – it did not look as though much was happening there at all.
It’s not that hard to get a good look through some half-hearted security fencing – but the houses look reasonable, especially for a low-cost number, from the outside. I’ve not seen the inside or the plan but it is always a bit suss when several trucks drive up to a site, off load a house and then drive away. Someone, somewhere, needs to get on top of this before the vandals get in and trash them.
As usual, the pages of Stuff are full of the brain farts of the public, some rather thoughtful, others less so. Here’s one:
Tekniks“Why doesn’t the Government buy it, great opportunity to train apprentices and get the Kiwi rebuild going.”
(Actually, that is a really good question!)
but followed by:
Mpsgts“Prefab homes are far too cheap to be considered for state houses. Need to be around $750,000. Prefabs are also below the dignity of many who would be expected to occupy them.”
And I’m not sure which planet Mpsgts crawled from. Apparently one in which houses can only be OK if they cost $750,000. Curious. But his is a real blow to the people who have contracted to buy one of the Matrix homes. Tell me if you know more.

Post-script: GreenWelly has been on the ball, and noted that this development is indeed by Matrix, and is / has been marketed by Ray White. The homes are meant to be two stories – and so just in case the details disappear off the Ray White site (as these things happen to do when receivers are involved) then I’ve posted up their pics for posterity.




24 - 07 - 18

Yip, They are matrix Homes,

There are floor plans too, looks like an 80sqm 2 bedroom place for $510K.

looks like the blue tarps are covering ground floor modules that need a top floor placed on top….

24 - 07 - 18

Well that’s a total tragedy then, as putting one floor on top of another is going to take considerable time and muscle. If they are not properly seen to soon, the whole lot will be scrapped and that would be a horrible waste. Leaving them there like that for 6 months while the receivers get their act together would be the kiss of death….

24 - 07 - 18

There is a fair bit of a disconnect between “Starting at $139,000” and “an 80sqm 2 bedroom place for $510K”, and it can’t all be land cost. For a start, I’m not sure how a 2 story unit that is 34.9m2 per floor, ie max 70m2 – gets noted as being 80m2 – was that your maths greenwelly?

If they are 70m2 each, then $510k = $7285 / m2, which is bloody expensive. I certainly don’t see any great amount of designers flourishes or brilliant architecture or fantastic quality that would bring the cost up to that. A more reasonable price for the unit on its own (not inc land) would be about $245,000 – in which case they would sell like hot cakes. That’s a build price of $3500/m2 – which is still high.

The starting price of $139,000 would equate to just $1985/m2 if it was one of these. Sort of amazing that the NZ official figures of volume built housing is still under $2000/m2, but that’s what it would take. Let’s give Matrix the benefit of the doubt and say that they can produce the buildings for $2k /m2 which would put the construction cost of these at $140k each double-floor dwelling unit. Land price directly under the house would be about $100k, and then their share of the common land might be another $100k MAX. So, all up, I make this deal worth only $340,000 in total. If Matrix and Ray White were hoping for $170k profit each from these, then they were dreaming.

24 - 07 - 18

From the Herald just now:
“I’m gutted. I did everything I could to stop it happening, working very hard for a very long time. I could not secure the investment I needed. It was a comparatively minor amount and the shareholders did all they could,” Murrie said last night. Asked how much creditors were owed, he said: “It would be more than $2 million, there’s no chance of it being as high as $3 million.”

Receivers appointed on July 18 are BDO Wellington’s Iain Shephard and Jessica Kellow. The first report is yet to be issued. Murrie said Matrix built around 100 homes during its three-year trading life. The factory was opened in February 2015 by the then-Finance Minister Bill English.

At the time, Murrie said of the 8000sq m Trentham factory in the ex-General Motors assembly plant: “People are building components of houses, then assembling them on the site. But the whole thing here is we’re turning fully finished houses with code compliance certificates.” Asked last night who tipped the business into receivership, he said: “I did it. I had to. We could not continue to trade without being sure we could fund it.”

He expressed concern about lack of orders and speed to enable the homes to be trucked to sites, but stressed that he was not pointing the finger at anyone in particular.”

24 - 07 - 18

And more from the Herald, which might answer some of Lardyboy’s questions:
“Solution Street is aiming to sell its prefab places to first-home buyers, targeting Auckland’s cheapest suburbs where it is applying the fast construction techniques to keep costs down. Shareholders had invested heavily in the business to try to support it financially, he said. Companies Office records show Matrix Homes directors are Christopher John Dunnett of Western Australia, Joseph Hannah of the United Arab Emirates, Murrie of Lyall Bay and Hugh Alexander Smith of Mt Victoria, Wellington. The shareholding is split 12 ways.

In 2015, Matrix said it was asking $89,000 for a 51sq m, one-bedroom home, $99,000 for a 70sq m two-bedroom place, $195,000 for 140sq m four-bedroom two-bathrooms homes but transport costs were an extra $10,000 in Wellington and $20,000 in Auckland. Piles were included in Wellington transport costs but not in Auckland, Matrix said in information it supplied. Pile costs for Auckland were an extra $3000, Matrix Homes estimated at the time.”

Seamonkey Madness
25 - 07 - 18

With the final costs for this site in particular, you could see that they were pumping a lot of money into retaining, trying to shoehorn the site between Porirua Stream and William Earp Place. My bet is that is where a large chunk of change went, and the developer is trying to recoup that (and make a profit).

25 - 07 - 18

Seamonkey, you’re right, an enormous amount has gone into the site, but then again – they must have known that some time ago, probably before they even started building.

25 - 07 - 18

@lardylad, the 80sqm was my calculation, I assumed (perhaps incorrectly) the decks shown in the renders were around 10sq m

(Hey the real estate ad showed they were going to have a deck, why would I not believe them :)

26 - 07 - 18

Green – that’s alright mate, no hard feelings!
Those new figures from the Herald – house only, no land, but:
$89,000 for a 51sq m, one-bedroom home = $1745/m2
$99,000 for a 70sq m two-bedroom place = $1414/m2
$195,000 for 140sq m four-bedroom two-bathrooms homes = $1392/m2

Those are pretty awesome prices, for what they are. Supply your own land.

26 - 07 - 18

Some small good news re Matrix:

31 - 07 - 18

Truly feel for those involved with the development in Tawa, suppliers left in the lurch, and the workers who are now out of a job.

I completed about 15 or so projects for the company a few years back. The concept at the time was innovative (two modules that could be combined to create a number of configurations under the same multiproof consent), but the cracks started to show as sales and Matrix’s own costs didn’t match expectations, and they stopped paying invoices.

It’s a little frustrating that their poor management (all my dealings with the directors made it pretty clear that they had very little familiarity with the construction industry) has compounded the negative perception already applied to prefab/off-site sector..