How does a block of apartments cost so much?

The Herald reports:

A new Kāinga Ora complex has opened in Auckland at a cost of $1.2 million per apartment as one of New Zealand’s leading developers calls the state-run agency’s record of running up billions in debt a national scandal and embarrassment. …

The agency yesterday allowed the public to view the newly built Meadowbank complex, saying it spent $11m on the three three-bedroom and six two-bedroom apartments.

That equates to $1.2m per apartment and rises to $1.7m if the about $4m value of the land already owned by Kāinga Ora is added.

This is an astonishing waste of money. A cost to taxpayers of $1.7 million per apartment.

If you assume the two bedroom apartments are 100 square metres each and the three bedroom ones 133 square metres each, then that is a build cost (excluding land) of $11,000 per square metre.

Building websites estimate a cheap build is $3k per sq m, a standard build around $5k per sq m and a bespoke build around $7k per sq m.

How do some apartments cost twice as much standard build and 50% more than a bespoke build?

It is because taxpayers are paying.

A more reasonable build cost could see twice as many apartments built.