National's housing spokesperson Judith Collins says there hasn't been a single sale of KiwiBuild houses in Canterbury since the first ones went on the market three months ago.
“The Minister of Housing and Urban Development’s deal with Mike Greer Homes to underwrite 65 KiwiBuild houses in Canterbury with hundreds of millions of taxpayer dollars, is shaping up as a serious financial risk to the people of New Zealand," she says.
“The first seven of these houses hit the market on February 20 with prices ranging from $459,000 to $480,000 – and Mike Greer Homes hasn’t had a single nibble from home buyers since then."
Collins circulated a list of KiwiBuild sales (up to May 8) given in response to National Party written Parliamentary questions. And these showed no sales in Canterbury (highlighted in yellow).
“There is little-to-zero demand for houses in this price bracket in Christchurch, despite [Minister of Housing and Urban Development Phil] Twyford’s assertion to the contrary. It shows just how little thought was put into his KiwiBuild policy, which has been a spectacular failure."
Earlier this year Twyford admitted KiwiBuild was falling short of targets and he said the policy was to be "recalibrated".
In an interview with interest.co.nz's Jenée Tibshraeny earlier this month Twyford he wouldn’t confirm nor deny whether the target of 100,000 homes would remain in the KiwiBuild recalibration he expected to reveal in mid-June.
Collins said the Canterbury houses have gone unsold for so long now there is "a real risk" taxpayers will either have to buy them back as surplus to requirements, or Mike Greer Homes will drop their price on the open market and taxpayers will top up the lost profits.
“Taxpayers should be worried. The Minister of Housing and Urban Development has already committed to underwrite $660 million of KiwiBuild homes across the country.
“He should admit defeat and dump this terrible KiwiBuild policy now before he throws any more of New Zealanders’ tax dollars at developers to cover up his failings."
Collins says the National Party would focus its efforts on reforming the Resource Management Act, to bring down the cost of building for all New Zealanders, and support community housing providers "who are much more experienced in this field than Mr Twyford".
44 Comments
Has Mrs Collins recognised that her party consistently misled New Zealanders into believing there was a housing shortage? Have the press realised that they too are complicit in propagating the misinformation and that the reality of the situation today is that what we are experiencing now is the unwind of an unsustainable credit bubble.
Sure they’ll be a commentator along shortly to say everything is rosy in Palmy or Christchurch but these markets will not produce enough credit growth for the economy to keep ticking over on expanding money supply.
@Joe Wilkes Did her party actually mislead us into believing there was a housing shortage ?
Did they not say there was no crisis , and get taken to task for so -doing ?
I seem to recall that it was the Real Estate sector , some economists ( Including Auckland Council's own economist ) , the NZ Herald , many builders and developers , and a few property-spruikers who peddaled the housing shortage narrative.
Nice try Boatman.
"Quite simply, not enough new houses are being built in New Zealand. This is a recent phenomenon. In many parts of the country, increases in demand for housing are now outstripping supply"
John 2007.
Both sides have been guilty Boatman of not publicly recognising what was really driving the economy.. now that was either deliberately done or because of simple politicaL ignorance. I would say that the banks have far more control of the policy narrative and emotional control of the populous than do any of the political parties.
There is an Auckland housing shortage.
Joe Wilkes is a property expert who inflates the amount of building going on in Auckland to sell everyone on this all being just like Ireland and he claims lots of relevant expertise from Ireland. If you want to see some misleading, see how Joe presents a graph showing the housing shortage in Auckland (see 10 minutes in below YouTube). The graph shows housing consents/approvals normalised to 2002 in Sydney, Melbourne and Auckland - with Auckland clearly being massively behind. However Joe pretends it shows raw numbers, tells everyone to look at the right hand end of the graph and then says since Auckland is the smaller city it must be building more housing per person. Misleading is one way of describing it.
https://www.youtube.com/watch?v=NhcSnscqQZk&list=PLtOkGwwIgTJGLMnK7jNGn…
Council representative / bank economist or developer? If you want to reference Ireland then you really should reference the macro comparisons in that particular post.
https://youtu.be/ISvdDCctE64?list=PLtOkGwwIgTJGLMnK7jNGnereqRyyFywI_
That Auckland to Aussie comparison is misleading and there is a whole series of DFA videos - Auckland Housing Crisis (?) - saying that the housing shortage in Auckland is a myth. And on here commenting today saying there is no housing shortage. This is all bad data.
Macro analysis based on bad data can have a few problems.
As we have not built enough houses Auckland is an inelastic house price market. Any demand fall will cause a larger reduction in house prices here than will occur in Sydney, Melbourne, Brisbane. Also there will be less reduction in rents, as there are far fewer vacant buildings in Auckland. Auckland is in the worst shape of Australasia facing a credit crunch.
Removing optimistically false data about housing numbers does not improve the outlook.
What a bunch of clowns we have in both major parties.
On the one hand, a minister who is way out of his depth and turning a promising policy (remember it was created by David Shearer, not Twyford) into a disaster zone.
On the other, the same old 'reform the RMA' garbage from Collins.
Rather depressing, really.
The problem is quite simple and we have seen it play out in Australia. The electorate only have limited tolerance to move towards the left and that is bringing Labour towards the centre, in almost 'no man's land'. Economic and social conditions will need to get worse, for more of the population, if we are to see the shift towards the left required.
"shift to the left required" What kind of crazy are you? Shifts to the left are almost universally associated with worse outcomes - from extremes like Venezuela and Cuba and Argentina and Greece to creeping decline of Southern Europe and Scandanavia and Latin America - all trying to vote themselves rich and all failing. Shift's to the left just make everyone poorer and leave individuals and government unable to finance quality of life improvements.
The thing is they can only afford to be left of centre to their extent because their economies have been successful. Their past economic success however has very little to do with being left and were developed in a different economic time and political climate.
- "If you look at the years in which these countries built the wealth their citizens now enjoy, it was long before leftist ideas took hold. For instance, from 1870 through 1936, Sweden was the fastest growing economy in the world. But after 1975—when the Swedish state began to expand in earnest. Sweden’s economy noticeably slowed, falling from the 4th richest in the world to the 13th by the mid 1990s.
And Nordic voters are starting to take notice. Scandanavian governments have been paring down the size of their governments. Since the 1990s, the total taxation of the Swedish economy as a percentage of GDP has fallen more than 5%, while labor market reforms, such as Denmark’s cutting of unemployment benefits have helped Scandanavian economies rocket up measures of economic freedom."
http://fortune.com/2016/01/26/democrat-bernie-sanders-scandinavia-socia…
Some good points. But there is obviously a spectrum.
We don't necessarily have to go as far left as the Nordic countries did.
Note - having centre / centre-right policies is hardly a guarantee for economic success, either. Countries with centre / centre-right government policies like USA, Aus and NZ are showing some cracks. And a country like the USA has different sorts of economic and social problems, in particular inequity.
Some economists are really questioning the extent to which centre-right policies are good for the economy, and centre-left policies are bad. I just finished reading this guy's book:
Very true as well. I wasn't specifically advocating for our current right/centre right policies as yes they do have issues, I was more pointing out that going more left isn't necessarily the answer. My biggest issue is the monetary system behind the economic system, our current economies would be a lot more efficient and fairer if we stopped money creation and inflation targetting in my opinion.
Have a look at this graph to see the effect depegging from gold had in 1971 on the income of the bottom 99% (in the US) and the effect the deregulation of the financial sector in the early 80's on the top 1%.
http://www.the-crises.com/wp-content/uploads/2010/12/income-inequality-…
Yep. And the left/right divide is in many respects very unhelpful. Although I generally call myself centre-left I favour some policies which could be labelled centre-right or libertarian.
For me a major downfall of politics is that centre left governments are automatically allergic to policies of a centre-right nature, and vice versa! There is no reason - other than ideological - why certain policies of a government might be interventionalist, and others libertarian.
It's why the 'theory of Twyford' is really interesting. Centre-left in terms of government building houses, centre-right in terms of loosening planning regulations. That's why for me it's a real pity that Twyford's actions have not matched his words.
Agree again. I fall mostly on the libertarian side however also acknowledge the need for social safety nets and the current need for regulation (due again to our failed monetary system). Are we too dumb as voters to understand anything other than left and right? It seems nuance has been a causuality of our times.
I think Twyford screwed up on both issues. While I didn't agree with it, if you are going to build then build and if you are to loosen planning regulations then do it for everyone not just the government. This is where competence in government actually matters.
Very true. Certain centre-left democracies may have failed to deliver in recent times mainly because the effectiveness of the centrally planned portion of your mixed economy is as good as the quality of your planners (politicians, government departments and agencies, etc.) and decisiveness of their executors.
If we look at Labour-Green-NZF's post-election scorecard, in the 18+ months in power, they've been able to deliver quite a bit on policy and barely on tangible results.
Foyle,
I neither want NZ to be a Socialist nor a Neo Liberal economy/country. What I want to see is far less inequality which would be good not just just for those at the bottom of the heap,but for the whole country. There is plenty of evidence for this if you want to look for it. Here is a small selection; The Spirit Level,by Wilkinson and Pickett, The Price of Inequality by Stiglitz, Ill fares the Land by Judt, Saving Capitalism by Reich, the Growth Delusion by Pilling and Doughnut Economics by Raworth.
No country is perfect,but overall,the countries of Northern Europe fare well on on pretty much any measure you want to use. If our choice is between their social democracy and say the US,then I know which I prefer.
Produce better and better politicians? Just want our politicians to be representative of our voters. I'd say they are well meaning, well intentioned and often rather confused - which maps quite well to the comments on Interest.co.nz . The politicians to avoid are those who will lead us to a new utopia: Pol Pot, Hitler, Mao, Stalin.
Add to that the sky-high insurance premium bills that are about to arrive in our mailbox. A lot of my neighbours, who currently live in the capital region but don't necessarily have to, are jumping ship while they still can. I can, all of a sudden, spot at least 12 "Open Home" signs up from any point on my street.
I feel for the renters in the capital, their limited stock to choose from is about to get a whole lot scarcer, thanks to these added costs that will be passed down.
A good point. For many in wellington the insurance increases, pretty much mandatory if you have a mortgage, will be like adding 100k to the mortgage payments for the entire lifetime of the occupancy on a non reducing basis. The buyers, at some point, if they’re smart enough will start to factor that in to what they can realistically afford to pay.
The Man is the expert so he can advise, but the 2 bedroon Mike Greer homes are advertised for 470k. My understanding is that tidy 2 bedroom homes (albeit not new) can be bought in ok areas in Christchurch for circa 380k, so that might explain why these homes are not selling.
The Mike Greer homes website Kiwibuild section only shows 2 homes for sale, in Faringdon. And there's 4 areas in Canterbury supposedly available. If MG doesn't advertise them, I'd hardly think they deserve any money if they don't sell. Or, there's really only 2 homes. If they were sold cheap it might cost taxpayers $100k. About the tax take on one new normal build, big deal.
https://www.kiwibuild.govt.nz/available-homes/?location=6&status=Availa… all four locations listed on the kiwibuild website, which kiwiuild buyers should be looking at if they want a kiwibuild home.
Why would Mike Greer waste $ on advertising when there is supposed to be a flood of people waiting for these kiwibuild homes.. and he's already got a buyer, signed contract and all! (That buyer would be me and you via our proxy, the Taxman.)
Dig a hole, bury the damn idiotic project.
LOL ... Sorry to have to say it , but in 2017 during the election campaign , on this forum ....I TOLD YOU SO!!!
Kiwibuild will go down in history as the worst thought -through, illogical, delusional , pie-in-the-sky plan , in the entire history of NZ Politics .
It was framed around a complete misunderstanding of the drivers of the housing market , and the developers snouts were wet even before the first trough was installed in the paddock .
Kiwibuild, though never perfect by a long stretch, came from a time of rapidly rising, expensive housing and would have fared better in a market that continued in that way. It does now need to go, and something else needs to be done. I think it needs to be almost harking back to the days of Micky Savage and get lots and lots of State Housing built, of which some can be singled out for onsale to tenants.
I think we will find that Kiwibuild was devised as a government driven house building programme, which was predicated on govt being more hands in, rather than the 'buy off the developer' farce it has become. Then the policy development went on the back burner, then lo and behold Labour won the election against all odds.
So really they dropped the ball in their policy work and were 'caught out' with the election result. I guess it shows no matter how far behind you are, your policies need to be well thought out and considered.
The so called housing crisis is not one so much of supply, but affordability.
There are tens of thousands of existing houses for sale right now.
Why doesn’t the government just buy a few hundred a make a dent in the problem immediately?
The real problem is that buyers are terrified of borrowing huge sums of money, when it comes with personal guarantees plus rates, insurances etc.
it wouldn’t matter if interest rates were zero, people would still be terrified of the debt and the responsibilities that come with that debt.
Those houses are priced well above market prices - the taxpayers are being taken for a ride. The 2 bedroom one at 5 Te Rito St is priced at $459,000 which is what the one next door sold for back in 2015. Both houses have a 2016 RV of $435,000 so they are expecting Kiwibuild buyers to pay $20k over RV. But wait, there's more! The one at 9 Te Rito St sold in August last year for $422,500. https://www.qv.co.nz/property/9-te-rito-street-marshland-christchurch-8… - and that was a three bedroom house!
Kiwibuild is nothing but a taxpayer funded bail out for corporate developers who need to get rid of over priced homes rather than drop their prices. I can't believe this Govt was so gullible as to fall for it.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.