23 July 2019

First National: Te Kauwhata KiwiBuild development a ‘white elephant’

First National Real Estate Chief Executive Bob Brereton is predicting that homes currently being built as part of a KiwiBuild development, in Te Kauwhata, will not sell and that the Government will be left with 175 homes and few, if any, buyers.

The Te Kauwhata KiwiBuild homes will be part of a 1600 home lakeside development which will include a café, restaurant, childcare centre, small office space, and a medical centre – however, according to Mr Brereton, market demand doesn’t stack up.

“The demand to buy a first home in Te Kauwhata simply doesn’t exist and the Government is just repeating the mistakes of the much publicised Wanaka debacle. Building 175 new homes in a location with little employment and a large commute to Auckland is madness and will almost certainly end with most of the KiwiBuild homes failing to sell”.

Mr Brereton says that, while he supports the idea of a ‘reset’ of KiwiBuild, a fundamental overhaul is required if the program is to have any chance of succeeding.

“Rebranding won’t be enough. We need a complete rethink of the policy and a new, market focused, approach”.

“The market is already building many more than 10,000 homes per year without any involvement from KiwiBuild, so clearly the Government doesn’t actually need to be in the business of building these homes”.

Mr Brereton says that the Government should identify existing homes which are already within the $650,00 price cap deemed ‘affordable’ by the Government.

“There are areas across NZ where affordable housing already exists. Even in Auckland there are still houses selling for under $650,000”.

However, Mr Brereton notes that the real emerging issue is around the lack of affordable rental properties. He says that the current government focus is doing little to address this issue and may even exacerbate it.

“The problem has been entirely misinterpreted. The government seems to be confusing a lack of accommodation with a lack of affordability for first home buyers”.

“First home buyers are currently buying homes in numbers which are above historic averages in terms of activity in the marketplace and, like the building sector, are getting on and addressing the issue on their own”.

“What we really need is for the Government to stop stigmatizing property investors and start working with them to address our emerging rental issues”.

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