Psst, want a cheap Kiwibuild house?

Did Twyford let something slip in question time in the House on Tuesday?

Question 9 was about the Kiwibuild scheme and the “buying off-the-plans” initiative?and what KiwiBuild developments have been announced so far through that initiative.

Twyford gave the numbers:

Announced:?25 homes in Onehunga; 211 homes in Queenstown Lakes; 20 homes in Mount Albert; 175 homes in Te Kauwhata.

To be completed this year: 10?homes in Queenstown Lakes; 10 in Te Kauwhata;?10 homes in Otahuhu,?with a further nine being built by June 2019.

Adding up, there are 18 built and sold, and another 39 coming by June 2019. If my maths is correct that is 57 by June 2019 as against a promise of 1000 by July 2019.

Close enough!

Bayly then asked a question about how many of the 10 in Queenstown Lakes got no bids, but Twyford dodged that by asking for a written question.

So Bayly drilled into the details of the Buying off the Plan Initiative: Quote.

What is he planning to do if houses KiwiBuild has underwritten in W?naka and other such Buying off the Plans developments cannot be sold at the price agreed between KiwiBuild and the developer?

TWYFORD: The nature of the Buying off the Plans scheme is that there’s an underwrite by the Crown. So in the event of a KiwiBuild home being unsold at the end of the contracted period, the Crown then purchases it and can onsell it.

Bayly: Can he confirm that KiwiBuild will not be permitted to sell houses at a discount to the original price agreed with the developer?

TWYFORD: No. end quote.

Twyford could not confirm that Kiwbuild would not be allowed to sell houses that they had underwritten, at a discount.? Stripping out the double negatives that seems to suggest the following is a real possibility:

  • Kiwibuild (aka Phil Twyford) underwrites buy off the plan houses.
  • Developers build houses.
  • Not enough people enter the ballot to buy (already happened to the first 10 at Queenstown Lakes).
  • The developer is left with unsold houses.
  • The developer then calls up the underwriter (Twyford) and asks for the cash.
  • Twyford thus purchases houses no one wants.
  • Twyford needs the cash out to recycle – remember $2 billion is going to build 100,000 houses.
  • Twyford flogs them off at a discount thus screwing the local property market.

Let’s Do This!