Without a single house built yet, Kiwibuild is in trouble

Phil Twyford has been making heroic assumptions for some time now over Kiwibuild.

Not even a single house has been built yet and already the policy looks to be in big, big trouble.

The Government’s flagship policy to deliver low-cost homes to first time buyers could be a fail on the affordability front, according to its own ministry officials.

Documents released to Newshub Nation under the Official Information Act reveal KiwiBuild apartments and houses to be priced up to $600,000 in Auckland could still be well out of reach of their target market.   

The Ministry of Business, Innovation and Employment (MBIE) briefing paper ‘Implementing KiwiBuild’ is dated last November and went to both Housing Minister Phil Twyford and the Minister for Building and Construction.

It identifies price as one of the top risk factors for Labour’s so-called affordable housing strategy.

“Indicative modelling suggests there may be insufficient first home buyers willing and able to purchase a 100,000 KiwiBuild houses at the price points that are outlined in your manifesto.”

Oh dear. Phil Twyford’s mouth has written cheques his government can’t cash.

The Ministry documents estimate that a first home buyer household would need to be earning $114,000 a year in order to purchase a $500,000 KiwiBuild house. That’s compared, it says, to a median household income of $90,000.

Mr Twyford estimated a buy-in household income of almost half that.

“You are probably going to have a household income I would guess $60,000 plus to buy a Kiwibuild property straight up,” he told Newshub Nation.

Asked how many rental households in Auckland would meet the $144,000 income threshold, the Minister said: “I’d have to get advice on that… I just don’t know.

Why doesn’t the minister know? I thought he knew everything.

But advice that went to the Housing Minister in November contained that information.

The MBIE papers released to Newshub Nation say an analysis of the Auckland housing market in 2015 suggested only 25,000 private rental households in paid employment in the city made enough to buy a $500,000 house.

“This suggests the target cohort and or price points may be need to be revised or additional support for KiwiBuild first home buyers provided.”

Mr Twyford said he’s looking at ways to make KiwiBuild more affordable including shared equity schemes and he’s not ruling out the Government retaining part ownership of the properties.

But that could create funding issues for the flagship policy, as it is supposed to be funded by an initial $2 billion capital injection, which is to be recycled into more KiwiBuild houses as the completed ones are sold.

The Labour government plans to build 100,000 so-called affordable houses in a decade, with half of them in Auckland. In the rest of the country, the properties will be priced between $300,000 and $500,000.

None have been built as yet. I can assure readers that none will be available in Auckland for anywhere near $300,000–500,000. At some point soon this particular house of cards is going to come crashing down around Twyford’s lying ears.

 

-Newshub


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

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