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19 Sep 2018

Plans to Unlock Affordable Housing

The Government continues its attempt to unlock affordable housing across New Zealand, with homes from the KiwiBuild scheme already on the block in Auckland and new plans to build 10,000 homes as part of the Mt Roskill redevelopment project. All in all, the Government has committed $2 billion for KiwiBuild, as it aims to deliver 100,000 "modest starter" homes for first-home buyers over the next decade. The private sector is also starting to join the party, with ASB set to provide 95 percent housing loans to qualified KiwiBuild buyers.  

Prime Minister Jacinda Ardern says the Government is "opening the door to families locked out of home ownership" by increasing housing supply in key areas. During the first stage of the plan, 1,000 KiwiBuild houses will be produced over the next year. A modest 18 homes have already been completed as part of the McLennan Development in Auckland, with these "warm, modern and architecturally-designed stand-alone homes, made up of 12 three-bedroom homes selling for $579,000 and six four-bedroom homes selling for $649,000".

Prime Minister Ardern says KiwiBuild is "restoring the Kiwi dream" of home ownership to thousands of New Zealand families: “Our Government is opening the door to families locked out of home ownership by building affordable starter homes where the market failed to do so... KiwiBuild is the major plank in our Government’s plan to make housing more affordable. We have also changed the law to stop overseas speculators pricing New Zealanders out of the market."

New plans are also in place to build 10,000 affordable homes as part of the Mt Roskill redevelopment in Auckland, including the neighbouring suburbs of Hillsborough, Three Kings, Balmoral, Sandringham, Wesley, and New Windsor. When completed, 3,000 existing state houses will be replaced with 10,000 new homes, with work already underway to replace 440 state houses in Roskill South and Owairaka with 1600 new KiwiBuild and open market homes.

In order to qualify for a new home, applicants must be a first-home buyer or 'second chancer', earn less than $120,000 a year for a single buyer or $180,000 for multiple buyers, be a citizen or permanent resident, and intend to own and live in the home for at least three years. New buyers will also have to finance their homes, something that may become easier thanks to Kiwibank pre-approval and private sector intervention.

Kiwibank has already said it will pre-approve mortgages for up to 90 percent of the price of KiwiBuild homes, along with contributing $2000 towards moving or legal expenses. ASB recently topped that deal by offering KiwiBuild buyers mortgages with a small 5 percent deposit and providing an additional $2,500 in cash contributions. While certain boxes will need to be ticked, acting executive general manager of retail banking Claire McKinnon says "ASB will provide pre-approvals of up to 95% of the value of a KiwiBuild home for eligible customers, meaning participants may potentially only need a 5% deposit on their property."


Image source: sculpies/Shutterstock