With the limited supply, the scheme is estimated to take another five years to gain traction
National has raised concerns that KiwiBuild is not building enough three to four bedroom units for larger families, with the majority of homes under construction so far being one-two bedroom houses.
Minister of Housing and Urban Development Phil Twyford recently announced a new 18-apartment development in Mount Albert, all of which are one and two bedroom apartments ranging from $435,000 - $600,000 in price. According to National’s housing spokesperson Judith Collins, approximately 80% of New Zealanders who have registered for KiwiBuild are looking for a three or four bedroom home, and the supply is not currently reflecting this demand.
“Twyford’s KiwiBuild scheme has only 70 houses under construction and 56 of those are two bedrooms or smaller,” Collins stated. “On top of this, earlier this year the Minister told his Cabinet colleagues that smaller houses were likely to be built to achieve the price points for the programme.
“He needs to ensure that KiwiBuild is suitable for the Kiwi families he claims it will deliver for.”
According to Global Finance founder Ajay Kumar, interest from potential KiwiBuild clients has so far been pretty thin on the ground given the lack of supply. The balloting system is also a major cause for uncertainty, with there being no guarantee of gaining a home even if you’ve entered the ballot and been approved for a mortgage.
“We haven’t had many enquiries so far, mostly because there aren’t yet many houses available,” said Kumar.
“KiwiBuild is a good scheme, the homes are cheaper and there is huge demand, but the supply is extremely small at the moment. If our clients depend upon KiwiBuild, they’re still not certain whether or not they’ll get a home– it’s more or less a lottery, either you win it or you don’t.
“The main challenge is going to be getting the approvals from the banks, but still having that uncertainty of whether or not the client will get the house,” he added. “With the level of supply and demand at the moment, I anticipate it will take a minimum of five years for it to gain traction.”
