Ardern admits a $650,000 three-bedroom KiwiBuild home will still be unaffordable for 'too many', but says it's better than the Government doing nothing

Cartoon of Jacinda Ardern by Jacky Carpenter

Prime Minister Jacinda Ardern is batting away criticism over the Government admitting the cost of a three-bedroom KiwiBuild home in Auckland is likely to be $50,000 more than projected before the election.

Speaking to Radio New Zealand’s Guyon Espiner on Tuesday morning, Ardern admitted the $600,000 price-point Labour campaigned on before the election was based on modelling done two years ago.

Since then the cost of land has gone up and building costs have increased by 5%, upping the price of a larger KiwiBuild home to $650,000.

At this price, a buyer would most likely need a $130,000 deposit.

Ardern admitted $650,000 was still unaffordable for “too many people”, but noted the alternative was paying around a $1 million for an Auckland home.

“We don’t accept that and so that is why we have a really ambitious plan,” she said.

“People are saying we may fail. I would rather try than do nothing at all.”

Ardern said the Government was “looking to speak openly with the banking industry” about a shared equity model, where a bank would take a stake in a house to lower the initial cost. Included in the policy programme within the Labour-Greens confidence and supply agreement is a call to deliver innovative home ownership models within the State and broader community housing programme.

She also mentioned the existing Welcome Home Loan scheme, whereby Housing New Zealand can underwrite home loans issued by selected banks so that first home buyers only need a 10% deposit (banks usually require a 20% deposit).

Ardern acknowledged the Government was working with the private sector to underwrite houses off the plan further to some developments stalling due to credit drying up.

Yet she said the majority of homes would be directly developed by the Government.

They are houses that wouldn’t exist without the Government’s involvement, she affirmed.

She said work is underway to redevelop Housing New Zealand sites for both Housing New Zealand and KiwiBuild.

The Government is also working with iwi and other developers to build homes on “re-purposed” land.

And then there’s large scale urban development projects like that at Unitec, where around 3000 homes will be built.

Altogether, the Government has pledged to spend $2 billion on its KiwiBuild programme to build 100,000 affordable houses over the next decade. 

Meanwhile, National leader Simon Bridges says it’s likely KiwiBuild house prices will continue going up as the Government isn’t doing enough to increase supply.

“Effectively KiwiBuild is coming in and buying up what was already happening and slapping a KiwiBuild label on it,” he said.

“The test for them has been around additional houses.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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153 Comments

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You do not know whether you would fail or not so you try.

But when you know you are going to fail, you stop trying but find an alternative.

Dummy.

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Where’s the fail? Even if they only build half as many as they hoped, and they cost 10-15% more than originally intended, that’s still a huge win for First Home buyers, and New Zealand as a whole.

50,000 lower cost homes is a heck of a lot better than what National did with its 9 years of inaction.

Doing something bad is not better than nothing, why does everyone use that stupid argument.

Also to answer your question, the fail is in opportunity cost. Look it up.

I think the lessons from recent years is that it will require Government intervention to support the growth of supply. The early initiatives, such as the special housing areas, showed we didn't have the depth of skill and resources within the construction industry to deliver on its potential. There is also a very great need to reinvent the way we build houses (modular being only part of the issue).

What I believe will happen is that the Government intervention will accelerate a decline in Auckland house prices. Personally I think the $600,000 house will be viable because I believe land prices will fall more than other components.

I think one of the risks is the potential for developers to offer three-bedroom houses in suburban areas (such as Wellington) for less than the KiwiBuild price. This could lead to additional supply where it is not required.

The honeymoon is over .............. the surprise baby is on its way

I think the lessons from recent years is that it will require Government intervention to support the growth of supply.

Coincidentally, part of the way NZ previously achieved its high rate of home ownership. Something homeowners in NZ right now have all benefited from indirectly or directly.

Increasing supply is important.

"I think the lessons from recent years is that it will require Government intervention to support the growth of supply."

Only a crazy person would think that answer to a market distorted by too much government involvement is to have more government involvement.

I like sporting anecdotes with regards real life situations. One of my favourites is Mark Allen recounting his thought process during his comeback race at Kona. Several minutes down at the start of the run leg. Telling himself that the guy in front is younger than him, he doesn't need to prove anything after winning so many times. Coming up to the hotel he's staying at and thinking I could just stop here.
Then he realises all he wants is a big sign to say that he could win this race, but doesn't need to. And his brain is just fishing for excuses to not go all in. Because he's scared that if he gives 100% then it might still not be enough to win. BUT, he realises that if he doesn't give 100% effort right now, then he will definitely fail.

He won.

I don't know how many times I see in the work place people spending so much time and energy looking for reasons and justifications to not start something. Maybe its all part of our cut the tall poppy down culture here.

I have a lot more respect for people who start something, not knowing for sure they'll succeed but knowing that once on the path, lessons will be quickly learnt and you have something to refine from. And then keep moving forwards with a better and better product/service.

That's fine for start ups, but this in NZ inc. with Billions of $ at stake.

Have a good hard look at this graph of residential building consents:
https://www.interest.co.nz/property/86807/number-new-dwelling-consents-i...
They collapsed over Clark's last two terms, then grew from low of around 1000/month at start of National's term (with GFC recovery and then Earthquakes in 2011) to hit nearly 3000/month by end of National's term - really a triumph of growing supply at about 15% a year. If that had continued for another 3 year term it would have been up to almost 4500/month far exceeding Labour's (not now to be delivered) kiwibuild promises of around 3800/month.

Since labour has come in that rate of growth appears to have halted. Do you think Labour is actually going to see that overall rate increase by 10,000/year (800/month) during their term? Good intentions from a financially incompetent and business hating govt that destroys business confidence, raise taxes, pursues inflationary policies, murders productive industries and pisses money away on student bribery and NZF jollies doesn't get houses built. And tanking an economy and overtaxing is not the way to produce the discretionary spending that consumers and businesses need to finance new house builds.

NZ's median house price (excluding Auckland at $850k) is $460k. Very affordable. People can move out of Auckland - unemployment is low, but they choose not to. Auckland's house price issues are driven by expensive over-regulation of build - council and govt imposed costs adding $100k's to new build, and insufficient motorway infrastructure that (via long commutes) forces people to compete for houses closer to their workplaces.

Perhaps you can educate me, what are all these changes the Labour coalition has implemented that have stopped the consent applications dead exactly? OCR hasn't gone up, LVRs have been relaxed, so what exactly has been changed by the govt to slow the building market down? A few cents a litre of fuel tax doesn't account for it, so what essential factors have changed?

Or is the slow down due to nothing more than market conditions and exactly the same would've happened under national?

Everything they doing is against property so why would people invest. I personally dropped 2 builds that I was going to rent out both. I know a number of developers getting cautious and dropping builds, not just because of council but more because of tax issues and anti-property investmnet views of govt. The tax changes makes it further detrimental to invest for renting. Overall, they are knocking the confidence out of the market.
Supply going down, Rents will go up and more people without houses. Not great.

I still cant get over how $550k and $650k is affordable for 1st home buyers!!!!

a) Supply is not going down, if there are 100 houses today there will be 100 houses tomorrow. If "investors" dont buy that is more on the market for FHBers.

b) Rents will not go up, landlords already extract the maximum rent ppl can pay.

c) No one is really/seriously saying a 550k+ house is affordable by most FHBers. Until you chop 100k+ off the land value it will remain that way as well.

https://www.oneroof.co.nz/news/comment-whats-killing-new-housing-34508/?...

This is a good summary. The existing properties are way out of range of FHB unless they get parents help.

So you can't actaully point to a single regulatory change they have made can you? The only significant change they have actually made so far has been the 5 year brightline test, but that doesn't affect developers who were already subject to tax on trading profits, or long term investors who were going to hold the property for well more than 5 years. Oh and they announced the Unitec thing, but given we are supposedly short of a metric ton of housing in Auckland that wont even come close to limiting demand for houses.

I can only conclude that really nothing different would have happened under National, since nothing much has been changed by Labour (sadly).

Foyle
Building consents are one thing - actual building of houses is another.
Since 2014 property prices have risen by 50-100% of their original value.
Eg. A 3 bedroom home worth $500k now worth $750k in Auckland.

You mention $460k as 'very affordable' outside of Auckland? How is this so when the mean average income of NZer's is $53k..
I'm curious as to whether you reside in Auckland to make such a comment.
I was on $78k and would be stretching myself to purchase a home for $460k, $92k deposit and repayments that would account for 45% of my net pay. Not to mention rates/insurance/bills on top.

I do agree with your comment regarding Auckland's house price issues.. just interesting that you don't mention why that eventuated under the previous governments watch?

Foyle
Building consents are one thing - actual building of houses is another.
Since 2014 property prices have risen by 50-100% of their original value.
Eg. A 3 bedroom home worth $500k now worth $750k in Auckland.

You mention $460k as 'very affordable' outside of Auckland? How is this so when the mean average income of NZer's is $53k..
I'm curious as to whether you reside in Auckland to make such a comment.
I was on $78k and would be stretching myself to purchase a home for $460k, $92k deposit and repayments that would account for 45% of my net pay. Not to mention rates/insurance/bills on top.

I do agree with your comment regarding Auckland's house price issues.. just interesting that you don't mention why that eventuated under the previous governments watch?

Am i missing something? The graph doesn't show a "halt" in the rate of growth.

Consents Issued in Auckland -
Jan - increase from 512 in Jan 2017 to 718 in Jan 2018 (increase 29%)
Feb - decrease from 800 in Feb 2017 to 779 in Feb 2018 (decrease 3%)
Mar - increase from 942 in Mar 2017 to 1082 in Mar 2018 (increase 13%)

Consents Issued in New Zealand -
Jan - increase from 1752 in Jan 2017 to 1916 in Jan 2018 (increase 9%)
Feb - decrease from 2418 in Feb 2017 to 2412 in Feb 2018 (decrease 0.5%)
Mar - increase from 2779 in Mar 2017 to 2926 in Mar 2018 (increase 5%)

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'You do not know whether you would fail or not so you try.

But when you know you are going to fail, you stop trying but find an alternative.

Dummy.'

No need to sign off at the end of posts. Its not an email.

There's always a risk of failure when trying to solve a problem but sitting on your hands waiting for god to light the way rarely bares fruit.

Or as commonly said, perfect is the enemy of good.

There is also another saying,

never fight a battle unless you have to, and never fight it unless you can win it.

In this case $650k for a house is un-affordable ie un-winnable.

The Q I ask is then why is no one being honest about this being un-winable as is?

National - there is no problem, so no fix needed.
Labour - there is a problem, and a fix needed but its un-tenable.

I disagree.. but it all depends what you get for that $650k. If thats a perfectly serviceable, dry, warm, not too cramped 3 bedroom townhouse, with basic fixtures in the old Auckland City area, thats fine. If its some thrown together flimsy shoebox apartment in Whenuapai, or Papakura, then its rubbish. $650 / $120k (avg auckland full time working couple income) is only a 5.5 Multiple. I think thats realistic as long as interest rates stay low.

Create enough of them and you'll eventually drive prices down. Or, combine it with other measures and discourage landbanking and other undesirable practices that help drive prices up.

the problem is then someone(s) takes these losses in capital value, which was my concern really. ie we find say a Govn steps in and takes a share then the tx payer carries some or all of the loss. From memory something very similar was tried in the early 1990s in the UK and is went bad.

In a somewhat similar manner, Tennyson once said it is better to have loved and lost than to never have loved at all. There is one heck of a lot more truth in that sentiment than you will find in this naive and vacuous pronouncement by our PM. At the least, Tennyson’s reflection was not of the potential of compromising the public purse, was heartfelt and undoubtedly expressed with some knowledge of the fact.

I really like that saying, I was brought up to do things perfectly, it's taken me my whole adult life to give up the quest for perfection, for perfection 1) doesn't exist 2) gets in the way if doing things for the fear of failure

The alternatives are politically un-palatable. There are only options around someone(s) losing large amounts of money.

ie you either,

a) have to Nationalise the land to free it up enmass and then spend many millions putting infrastructure in

or

b) simply discount new homes for FHBers by getting tax payers to pay.

With b) private land owners make a killing, which is totally un-palatable to most voters or a) which the voters might well support but is un-palatable to the [foreign] land owners and probably foreign governments.

So rock and a hard place.

None of the options you outline can or will ever come about

Which is my point on "unpalatable"

However b) might...

there are a couple of things - reduce demand via immigration - both sides talk but are happy with the 100k people per year coming into NZ to drive demand, but haven't been willing to look at the infrastructure required to support it.
Another way would be to change the Auckland plan to allow say 3 story apartments anywhere in the region, irrespective of current rules to allow a higher density. History has shown that it takes 7 minutes to pass a law in NZ, but it would be a vote loser so no chance.

When a house is at 550k until you get to drop is by 30%+ most FHBers will not be in the game, neither of the above is much of a game changer on this scale I can see.

that's false. If you revamp our ridiculous planning laws and get rid of the RMA then the market will solve the problem that successive governments created in the first place

RMA is what protects NZ (if only in a limited way), ergo no we (most NZers it seems) do not want to get rid of it.

Not sure on your point on "planning laws" as its so vague.

Well, they can always diddle with the WH Loan amount for Awkland, which as it's a Universal Pricing Signal to every property owner on the Hallowed Isthmus, will promptly cause a rearrangement of asking price: the 'price floor' rises. Instant CG for all and sundry, by Gubmint Edict.

After all, that's exactly what's happened every other time the WH loan limit was raised 'to make houses affordable'.......

Was also what National campaigned on. Another boost to investors.

She says''ambitious plan'''
I say '''unrealistic plan''
Back to the drawing board you go.Nine years of bitching about the Nats no policy and this is the best you could come up with.
I admit it's better than what the Nats did however this ain't the answer.

This government does not need to build houses. They just need to spend money on infrastructure to open up land already earmarked for future housing. The market will take care of the rest. Private developers don't have the means to put in the infrastructure but the government does.

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Plenty of infrastructure around parnell, ponsonby, herne bay.. these areas should be redeveloped into high(ish) density housing and apartment blocks. Its criminal having such low density housing that close to the city centre and be talking about Papkura expanding till it joins up with Pukekohe which is what will happen if central govt doesn't step in and feed the Auckland Unitary Plan into the shredder and break out a box of crayons and start again.

Go up the Sky Tower and look across the CBD. Much of it is low rise commercial rubbish ripe for redevelopment. There is no need to start a new political war trying to remove houses on the outer periphery from unwilling sellers.

Who said anything about unwilling sellers? Remove the regulations and let the owners use their land as they see fit which may include more denser housing. Just like a free market.

'Unwilling' to me runs the gamut from public works acquisition to a removal of quiet enjoyment of ones property to the point where it's untenable to remain in it. Are we talking about law of the jungle planning regs?

I thought you were a free-market man/down with regulations and bureaucracy type? Or only when it suits you?

We all need rules to keep us 'civilised'. If life hadn't worked out as well as it has, it suffices to say that you wouldn't want me buying an investment property next to your owner occupied home.

In the longer term both need to happen, there are plenty of people who wouldn't want to live right in the centre of the city, but don't wan't to be living out in the boonies of 'kura or hobsonville and commuting into the city daily.

Remove the planning restrictions/permitting nightmares (and materials duoploy) on those inner city leafy suburbs and soon enough you will find developers knocking on doors and writing cheques to built apartment buildings on the CBD edge

Totally agree, It always amazes me drive through from Kingsland to Eden Park the amount of single level industrial there, right next to two passenger train stations, the whole area should be bought up and large apartment blocks cover that whole area between rather than the odd metal works fabricators and post distribution centre

I don't disagree. However apartments are extremely expensive to build so that won't address a lack of affordable housing.
I am waning a bit on Kiwibuild. Maybe all concerned just need to accept that as NZ's one bigger city, like the vast majoriry of big and growing cities, high cost of housing is a fact of life. We need to get used to 'life after home ownership'.
That's why I am thinking now that the govt would be better placed building lots of market rate rental housing. Perhaps there could be a 'rent to buy' oprion within that model.

I think apartments will bring down the cost housing overall because if apartments are at the top end then the segment below gets pushed down and so fourth. The issues facing NZ is as you indicated the cost of building and over regulation. It is possible to build an entire apartment overseas (i.e. China) then ship it here. A lot of things will solve the housing crises not just one thing.

We could just change the laws so that all the new immigrants can live in tents on the front lawns of the likes of Eco Bird, TTP, TM2 properties etc? No need to worry about housing regulation then? Simple fix really - then we can just focus on immigration numbers and GDP figures.

IO, couldn’t set up a tent on my lawns as Gordon would tell you, it is far too cold and shaky!

Tents might prove to be more resilient in that type of environment? Less likely to fall over?

Perhaps, but then, just as likely to fall in.

No, tents are great. After Feb 2011 we camped for a week on the local school playing field. Through almost continuous aftershocks, felt very safe not being surrounded by heavy building materials. Luckily it was summer...

NZD130K for a deposit on an "affordable home"? By memory, most NZers "with a home" (even north of NZD1 mio) don't have cash savings of $130K. The data from Stats NZ would suggest that you would probably need to be sitting in the top quintile of h'hold by assets to be able to stump up for an affordable home with cash savings.

http://archive.stats.govt.nz/browse_for_stats/people_and_communities/Hou...

Therefore, that's an indicator that the property market is riddled with distortions and the wealth of NZers is somewhat of a fiction, particularly as it relates to access to spending power here and now (without a credit card).

Why would you have a large amount of cash savings while you have a mortgage? Anybody sane would pay down the mortgage, and keep hold of a 10K ish emergency cash deposit somewhere.

The only ones likely to have $130k cash (or equivalent) in the bank are those saving to buy, and those that have paid off the mortgage, and too scared to put money anywhere but a bank where it earns a pittance.

Why would you have a large amount of cash savings while you have a mortgage? Anybody sane would pay down the mortgage, and keep hold of a 10K ish emergency cash deposit somewhere.

Irrelevant to the point that most NZers don't appear to have 130K of cash at hand, whether they're home owners or not.

The only ones likely to have $130k cash (or equivalent) in the bank are those saving to buy,

Really? Without any actual data, it's impossible to say "saving for a mortgage individuals or h'holds are likely to have $130K of cash." In fact, the Stats NZ data I posted would suggest that directionally that would not be correct.

The problem is it a stupid criteria to start with. The $130k for a deposit doesn't have to be cash on hand till the day you go and sign paperwork for buying a house. Most of my money is tied up investments that can be liquidated in days or weeks, but is not cash on hand.

Sure, but you're stating to look a bit silly now. You're suggesting that NZers who have never bought a house are "likely to have" up to $130K that they can access through "financial assets". The data directionally doesn't support what you say. What you say might rub at the BBQ or at the pub but.....

....according to research using Stats NZ longitudinal data:

- 80% of NZers have less than $20K in cash savings

- 60% of NZers have a mean net worth less than the 130K needed for the deposit on an "affordable house" (that's "mean net worth", not access to financial assets)

https://www.stuff.co.nz/business/91890966/most-people-have-few-assets-an...

A doctor with $120,000 of outstanding student loan debt and $200,000 of shares has access to sufficient money to buy an affordable house but would still show as having a net worth that is less than $130,000!

Using data from 2010.. and again focusing on cash savings.. Also, that data is for individuals, not couples/households.

The average kiwisaver first-home withdrawal amount last month was $22,203 per person, so thats the first $44k of the deposit taken care of per couple. Do they include kiwisaver in cash-savings? (i'm guessing not)

Student loans for the average university educated couple will bring down the net worth figure by ~$35k per couple also, when in reality it doesn't affect borrowing (for property) much at all, and certainly will hide the savings they have in the overall net worth figures.

Oh, and if you qualify for a Welcome home loan(10% deposit reqd), you probably also qualify for Homestart grant of up to $10k for new build, thats only $65k deposit you need, minus $10k homestart, - $44K kiwisaver withdrawal.. hmm, looks like you only need $11k savings to purchase a $650k new home as FHBs.

So yes, if they have been planning and saving to buy a house, they quite likely will have access to a reasonable deposit. No, Joe average who hasn't been saving and has been off to the pub every week won't have $130k in his pocket, but couples that have been working towards it for a couple of years may well have $20k each in the bank + kiwisaver withdrawal. That will put them in range of a starter home.

Surely the fact that it costs $650k for a house on a small section should be the focus of any government intervention?

New Zealanders elected the Labour party into the Parliament believing in the confident promises of reforms to be brought about in the housing sector, immigration, productivity, wages etc. We committed to the proposed changes in our lives, not to become guinea pigs to a trial and error experiment.

Some New Zealanders voted for Labour, some for the Greens and some for NZF. They might have believed the fairy tale. 44% didn't vote for what we have now and continue to wash their hands of it. If you voted for it, you need to own that decision.

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The consequence of what we see was due to the last Govn's 9 years of in-action, they own this problem (though sure we can throw some of the poop at Helen Clark).

If you are ever lucky enough to have teenagers fighting with each other, sit them down together and ask them to detail who is responsible. When the guilty one is identified they will usually try and deflect by telling you all of the others’ transgressions. Doesn’t sound much different to these threads. If the Left truly believe that National had the answers and chose not to implement them, then just get it done. If the Left have no workable answers then maybe just maybe there aren’t any.

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While the word “fail” is being freely tossed around – how about one of the Key fails that underpins an awful lot of this – uncontrolled, poorly managed immigration.
Clearly getting a lot of houses (and affordable houses) off the ground is not an easy task – as the actions and results of both governments would attest – early days for the current Government obviously.
So wouldn’t you think while struggling with supply you’d spend just a moment or two on demand – really, just a comparative moment or two compared to the time and energy being consumed by the supply side.
Just so baffled by the inaction.

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Yep..Phil Goffs latest defence of immigration -

http://www.newshub.co.nz/home/politics/2018/05/phil-goff-stands-firm-imm...

Are these polticinas deliberatly missing the point? Sure we need Doctors ..and many other professions....but how many of the 100k or so immigraants are Doctors? As for nurses, the only reason we need them is the appalling local work conditions.

Is a pre-requisite of being in politics the ability to play dumb?

Too right! It's just that the powers that be know that if immigration was drastically reduced everything would go south and we'd clearly see that this 'great economy' is like the emperor in the nude.
I've long said that we're living in the land of the Lorax. Instead of cutting down trees, we cut up land and sell to new comers to make money for nothing. Trouble is, it's one thing to put a few pegs around a paddock and sell a bunch of arbitrary parcels, but it's another to put up all the infrastructure for the new comers.

“People are saying we may fail. I would rather try than do nothing at all.”
I guess it’s just tax payers money so what the heck.

Well if they were genuinely going to throw tax payers money away don't you they could achieve their original goal? Hey, why not sell them for $400k.

Bedder Helf, bedder edecation, and Homes for all... and people believed that dribble...

I want a Government to govern – not to be content merrily “trying things”.

if only they let the investors get on with it, investors would have continued to invest in houses and that would have continued to add to the rental supply with no need to use tax dollars to add to the rental stock. Instead of eliminating the speculators, they eliminated the investors. Simon Bridges will have a mess on his hands to deal with in 2020.

Load of tripe, long term rental investors are waiting to buy houses once the prices/yeilds get sane again, its only the specuvestors that are screaming at the thought of ringfencing and 5 year brightline tests.

650K is not affordable for the majority of people that do not own a home now. The key is the financing. The government can borrow longterm at very low interest rates. Use goverment borrowing to fund Kiwi Bank. Loan qualified owner-occupier buyers 100% of the 650K fixed at 3% for 10 years. Suddenly it's affordable. P&I payments of 630 per week. At the same time allow Auckland council to apply a special levy for any new homes requiring a code of compliance valued at over 1.5 mil from mid 2019 . Say $100,000. Let the rich trade house amongst themselves for a while. Then scarce resources can be diverted to building affordable houses for everyone else.

FAIL is going to be the only thing this Government does right.
Where is Twatford?
They are getting more pathetic by the day!
Anyone that states they may fail but that is better than not trying are losers!
In my world I would prefer a government that states what is going to be a win for the country and this lot are destined to FAIL as the leaders of all 3 parties have never been successful so far in life so why would you have expected them to be able to run NZ?
The only ones that still believe in them are unsuccessful themselves but always hoping things will get better!

In my world I would prefer a government that states what is going to be a win for the country

You mean like the RWC or "good problems to have"?

Even with the chances of the ABs winning another tournament, I don't think govts should be in the business of cheerleading or stroking the emotions of the sheeple.

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THe Boy

Depends on what you mean by fail?

In your view did the last govt fail with housing, or do you give them a pass?

If Twyford fails, what has he failed at? The ability to fix the 'fail' of national not?

Unless you think national did not fail?

You are so ideologically driven that you have no ability to ramp home responsability where it lies. This govt has inherited one great balls-up.

Yet in your weird world the cleaners are responsible for the mess they have been left to tidy up.

I always wondered who does the cartoons

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National never promised to build a single house during the election .

Labour did , and many people told them they were touting something that could not be done as their price point had been exceeded years before.

Gullible voters bought the lie .

Now Labour is in power along with a bunch of idealists who have suddenly realized they too were conned .

And thats it in a nutshell , Labour has all but confirmed their Flagship Policy is actually actually a row-boat .......... a huge con -job .

We need to rid ourselves of this administration as soon as possible

ha ha ..of course they didn't promise ... because Nat wouldnt admit there was an issue about anyhting!

They made a mess for 9 years and denied denied denied. W woudl you want them back?

They didnt want to admit that massive immigration without funding housing, infrastructure, hospitals, schools, govt departments and so on was a can kicking excercise...just long enough to get the knighthood through.

Oh dear ! ... The more this issue is pushed by the Gov the more stinky it will become ... And they continue digging deeper in the hole to find a way out of it ...She is still talking about 100,000 homes in 10 years , broken record?

I do not want to sound disrespectful to the office of the PM of NZ, but by any stretch of logic and commonsense , JA's statement above:
“People are saying we may fail. I would rather try than do nothing at all.”
is shallow and reflects political and business immaturity. This is serious business not some kid having a go at a question at school or someone having a go at bungee jumping!

Why should we always drive discussions and arguments to the extremes EITHER _ OR ? .... that is a blatant sign of weakness and closed mindedness.

We Either fail Or do nothing !? ...so we are going to do ANYTHING to be seen that we have done SOMETHING !! ....and should we fail then we will be excused because at least we TRIED.... eh !! .... how stupid and desperate is that ??

The housing issue will be the nail that will seal Labour's coffin and send them down the polls come 2020.

Twyford has effectively dug himself a hole so big he cant get out ............. maybe we should just trow the rest of these fools masquerading as a Government in the hole and be rid of them .

No need Boatman, each one of them is doing a very good job digging his own hole ... and collectively they will take the bosses down with them ...

It's early days , the clowns are just warming up ... the circus is just starting
... Wait for the rain this winter, the holes will be full of mud.

That hole is just the foundation of the monument to failure that this govt will be erecting over the coming years

To the above.
You've all made your point clear that you despise this government.
So do tell - what would you do differently? Or are you of the mind that there are enough houses in the market?

I'm curious - our population has grown (per capita) as one of the fastest in the OECD but our housing stocks haven't.

I'm assuming as National voters you would have profited from this as I have been a home owner with equity in our properties increasing by at least 50%.. I don't mind sharing as I bought a home with my wife in Palmy for $240k , now worth at least $360.. and given recent trends most likely $400k.

So what next for our young New Zealanders starting out earning 45-60k... taking 10 years to raise a deposit for their first home and perhaps raise a family.

Some of us in respected professions will probably never earn $100k p.a. eg. I'm a teacher of 17 years experience with a max income of $78k. I would financially struggle to buy the home I currently live in for my family.
So what do you say to those in the Police/Health/Education - you'll get a lot of job satisfaction but you're shit out of luck buying a home?

Perhaps none of you actually care and use this forum as a bitter rant about the govt - fair enough.
But I'll leave you with this " 46% voted for themselves in the last election, 54% voted for their country"

And for that reason alone change had to come..

You seem pretty keen to keep shilling the false narrative that the National Govt did nothing for housing, when in reality they did far more than their predecessors. Labour sold Kiwis a pup in the form of a gold plated Kiwibuild using outdated costings and now can't follow through. Instead we get an expanded Axis Series style programme which was already going on under the Nats - but acknowledging that would involve abandoning blind ideological prejudice, wouldn't it?

Not blind GV27 - it's just that under the National led coalition government, the population boomed while housing and infrastructure did not.

If what you are saying is correct; is that the previous government had already made inroads to addressing the supply problem... please elaborate further.

This link suggests 740 homes should be being built as I type
https://www.interest.co.nz/property/81743/nick-smith-announces-deals-don...

I just remember Nick Smith optimistically identifying land to build on, only to later find out it wasn't Crown land or had consulted Iwi etc.

I keep an open mind GV27, I'm intrigued to know more - with facts please.

I guess the issue is that after nine years in opposition - the last three talking relentlessly about a housing crisis, then 8 months in government - All we have are ill conceived ideas - nobody expected 10,000 houses to be built in year one - but a clear coherent plan and strategy of how it would happen was a minimum requirement.

The ITP issued last week - effectively signaled that the plan is to buy existing houses and developments off plan - so yes the government will have more houses available to HNZ - but they will not be extra houses - just stuff that was already in the pipeline

I am building eight 3 bed flats in a SHA in West Auckland - and when i checked with MBIE this week- they were more than happy to buy 1, 2 or all 8 off the plan at 650K - these were already consented and ringfenced for people with Mental health issues -

What i am seeing - is this government underwriting and subsidising developers in the same way that the accommodation supplement has subsidised landlords - or to put it another way

Same Shit Different Day !

you mean Same Shite Different Color..

thanks for sharing that bit of news BTW..

much better put !

Here is another titbit for you - stand by for a major U turn on the Super prison at Waikeria in the next ten days - trying to hide bad news in all the reporting about the budget -

The foundations are already going in - and note several articles in Stuff and the Herald about wings not fit for purpose - impact of the bail law - and worse before it gets better !!

fun fun fun!

my goodness!, nothing surprises me anymore, U turns galor ...

I cannot be convinced that this lot are so stupid not to realise that all these promises and pies in the sky would fall back on their own heads one day ...

Surely they knew that they would never be able to achieve all this without plans and proper costing ...

Most of what they said ( other than splashing money) have no feet to stand on .

It is so disturbing that they insist on pursuing the same coarse and swim against the tide.( it also started to piss off their supporters of late too)

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=120...

Their latest bright idea. This would certainly breathe life into the property market.

lol, throw everything including the kitchen sink @ this in order to be seen doing something ... second mortgage to push houses down the throat of FHBs - So affordability now comes in SECOND PLACE - First, lets get then to buy something - expensive? oh we will take care of it ....

Well this is good - House prices will be on the rise ppl, sooner than we thought !!

Go CoLs

Maybe even sooner than that. Homes.co.nz sent me an email to say my homes estimated value had increased from 96% of CV in March to 99% in April.

haha, I just had a call from one of the five Aircon contractors accredited by the ... Auckland City Council ...wait for it
Apparently, ACC has so much money to lend up to $5000 to install a heat pump in any house and the homeowner can pay that back through the Rates within 9 years @ 6.5% pa interest...and this has been going on for 7 years ....No Strings attached !!!!!!! ... I actually asked few times about any conditions - there are none ... money galor for homeowners and landlords!

Ok, how much money does the "poor and indebted" ACC has to throw at this? Are they working as lenders and competing with the likes of Gem , Q card, and other finance companies all in the name of helping people out ( @6.5%pa)

What the hell is going on?

There is an old adage. If you don’t know what you are talking about, don’t put it in writing. Did not take any time at all for this new government to fall into that one.They may well have inherited a problem but mealy mouthed utterances of no substance are of no use to anyone at all.

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Make note of it.. I actually agree with Eco Bird on something. They've lost the plot by needing to be seen to do something.
Kiwibuild was potentialy a good idea if they had got on with it and bulldozed Auckland councils zoning restrictions and bureaucracy, and actually got concrete and timber on the ground.
Then it became KiwiBuy.
Now its KiwiLoan. More debt, prop up house prices, and a ton of moral risk, and of course i'll be in the group that earns too much/doesn't have enough rugrats so I wont be accessing it, but will no doubt be expected to underwrite the interest free loans via taxation.

If they go ahead with this in 10 years time there will be couples with three kids, average incomes, and 600k of bank debt, another 200k of govt 2nd mortgage interest free debt, and of course between them $60k of interest free student loan debt.

It's a wierd feeling

R'amen brother.

This all gets crazier by the day. David Shearer mooted Kiwi build back in 2011 and still no definitive policy just ideas being plucked out of the sky.

We have a perfect storm

1) Worldwide low interest rates pushing up house prices - nothing we can do

2) Tax treatment of housing - its all very well to change the tax status of housing investors but the timing is wrong. Housing investors are providing low rental costs due to the low worldwide interest rates - ie their required yield is low. By changing the tax status in the short term we are going to end up with rising rental costs as investors move out of the market. In the face of high immigration & undersupply of housing those that can afford to buy houses will do so while the poorer face higher rents.

3) The government must turn down the immigration rate to something sustainable. We would only have half the current problem we currently have.

4) Get rid of developer contributions & use targeted rates to bring down the up front cost of housing. Its the users that create the demand for services not the developers.

5) Get rid of the construction materials duopoly

6) There is no profit in cheap housing for the private sector. Kiwibuild is necessary

National don’t have to say anything and better they didn’t .
The govt. every time it says anything just shows how out of their depth they really are!
Seriously interest free second mortgages?
Ffs if they need a second mortgage then they won’t have the income to service the first mortgage and no one in the private sector will come to the party and why should they?
Seriously the low income to be helped out to get a house at the expense of joe average who is working to pay for the shite this so-called government keeps blurting out!
Thing is that they would be better to come out and put their hands up and say we lied to everyone!
Twyford has gone quiet just like Davis as every time they speak they are just talking shite, so Jacinda is now speaking for them and whether she comes back from maternity leave is questionable.
We are in for a rocky ride with this lot and as I have said they will be the most despised govt. of all time.
We need National back in ASAP

From the article in the Herald re KiwiLoan:
Ardern said people on lower incomes had "no chance" at the moment at buying homes in Auckland while the average sale price was $1 million.

LOL, as if there are no houses in the 600K - $1M bracket left in Auckland
As if all houses are $1M+ ... what is wrong with this Lady?

this propaganda has gone way too far - we are becoming the laughing stock of the World - they started believing their own lies and they are most certainly OBSESSED with this crap !!

Could someone please let the PM know that we have thousands of houses in Auckland under 750K or just visit TradeMe ?
https://www.trademe.co.nz/browse/categoryattributesearchresults.aspx?134...

We were actually the laughing stock of the world when John Key pulling pony tails and Steven Joyce taking flying sausage to the face were the head items in American late night television.

Now we have a pregnant female PM who recently visited with the Queen and represented the country with great dignity. Think what was presented via the media was very positive - not negative....but just my thoughts...

Spin. The Queen puts up with all types, it's her job. Come back to us when Taxinda goes to Balmoral.

What is spin?

And this: for those who might entertain the idea of building now !!!
https://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=120...

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Shared equity pushes up prices. It's cancer. You don't fix a credit bubble with more credit.

Agree, it’s a terrible idea. I hope this one gets squashed ASAP

Seems like the standard government response to housing - obviously no idea about demand and supply. Pity Labour are already throwing in the towel on building houses!
I can see plenty of land near us that is used for bugger all, not too far from the CBD. Why don't they just buy it and build some houses on it? How hard can it be?

Shared equity – why not just say you’ve given up on addressing the underlying issues.
Not a good day for the government.
Not a good day for me – caught Goff on TV3 this morning – the career politician has comfortably nested – and then witnessed a Government quite excited with the thought of “trying things”.
Suggest the Government learn from today – decide if they want to actually govern, decide if they actually have the ability and fortitude to do what they signed up for.
If they fail, what on earth do I do with my vote next time around.

To all CoL supporters still dreaming of and hoping for a price crash ... The PM had some bad news for you !

Does anyone still believe that FHB should hold off a year or two and see cheaper properties handed to them on a silver plate ?

PT seems to be muzzled like Davis after the 50K foot in mouth blunder, WP is nowhere to be seen, JS might leave Construction portfolio and go back to Pacific Affairs or something. But Cheer up NZ. SJ has lots of money coming out of his ears ...

God save NZ

Yep not good Mycoplasma on the farms and foot in mouth in Parliament.

To bad our leaders are not familiar with the bible.
This what is written in Luke 14:28-30
28“But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it? 29Otherwise, you might complete only the foundation before running out of money, and then everyone would laugh at you. 30They would say, ‘There’s the person who started that building and couldn’t afford to finish it!’

*To bad our leaders are not familiar with the bible.*

No, really it's not. There are thousands of fairy tales out there, the Brothers Grimm do a far better job.

Little Red Riding Hood probably fits the current situation. H1 can be Grandma and Winnie can be the Wolf. As a back stop we have the Frog Prince, Sleeping Beauty, Snow White.

Or Winston Peters as Robin Hood...

Yes like "Taxinderella" - the one they seem to be drawing their ideas from.

As a darklord - are you sure you want to go down the bible path? (take from the poor or vulnerable for own wealth?)

Darklord eh? .... you are still using old expired propaganda material I see...

Didnt you get the memo? these terms are gone as Your mates in the CoLs are turning the Gov into the biggest Slumlord owning HNZ slums and biggest Darklord buying houses on the market to accommodate the FHBs as KB, to hell with the homeless for now !!

They even turned to Darklender in the last 24 hours

Cheer up IO , your mates days are counted

Not sure why but there's are really frightening/threatening type undertone to your comments these days....hope all is well.

Life couldn't be better IO,

No undertones whatsoever, just stating facts and events by the CoL which I know you support wholeheartedly and almost follow them to the wire.

It is time to stop calling others stupid names, that's all !

So you tell others to stop calling others stupid names, but then in the same comment use the term CoL? (calling other people a stupid name).

Ever googled hypocrite?

that is their name ( not a stupid name) :

They are The Coalition of Losers ... i.e. the coalition of the ones who lost the election majority votes ....nothing stupid about it,

that is the name given to them by a lot of NZers here and elsewhere.

You're starting to sound like Donald Trump

It's an incredibly stupid name. New Zealand has voted under MMP since 1993 and people vote knowing that coalitions will be formed based of the party vote and vote accordingly. If we were under first past the post the left vote would align behind the same party in their electorate causing a completely different set of results.

The vacuous losers are currently sitting in opposition.

Funny, the bit most people miss is the part about rich people and camels fitting through the head of a needle.

Pay attention coalition:

The call to arms was not “Let’s Try This!”

The Government needs to stop, take a deep breath and reload.

But they've been doing so well with "Ready, Fire, Aim!"

You know you could also measure success on the housing front if the decrease in the price of land is proportionately greater than the decrease in the total price.

I wish like hell that this CoLs stand by its promise and free up land in Auckland and main cities -

I dare them to grow some Balls and Brains and tackle this problem at its ROOT. I challenge them to listen to industry and business and learn few new tricks instead of listening to their Mates and their useless "strategic" advisers.

Grow some GUTs and clip the ACC and RMA wings to make life easier for everyone. Kill the monsters instead of Feeding them !

Take sensible and practical measures to lower building and material costs!

The challenge is On - Do or Die Labour !!

Too late its been an "Epic Fail" from day one with this lot.

Hard to believe, but doing nothing might have actually better than 'trying' in this case. Incredibly, they've achieved next to nothing they've been voted in for, but yet managed to add to the burden of your average kiwi in short order. Does our government actually work for us anymore?

For any younger kiwis out there, don't be sucked in by the hope and change/more of the same but better shtick. I've heard it a thousand times before and I've never seen either the left or right in NZ create anything but more committees, paperwork, diversions, false hope and bureaucratic churn. They're institutionally incapable of solving a problem. Just leave the country and at least get on with your career in an interesting part of the world. Don't bother coming back....you're not needed in the land of low wages, rip-off prices and 100% incompetence.

Maybe invent an app for the disintermediation of government, banking and un-real estate and then come back.

Yep its so easy to bring in a new tax rather than fix old problems.Like I said right at the beginning, this lot are gone next election in a landslide. Keep going like they are at present and they are gone for another 9 years.

I'm surprised at the vitriol being exhibited on this thread from both left and right. 650k is the minimum price for a new three bedroom house in New Elysium. Something of a bargain. I applaud Labour for being grounded in reality and wishing to build suitable houses in the Global City that are likely to be good investments..

Well that's something of a predictable troll. Nothing more, nothing less.

You and DGZ seem to have occasional ‘moments’. Scary.

Where's the lie though?

If a couple puts up 130k as a deposit and takes out a 520k mortgage the interest cost is about $450 a week. In the long term they will be better off than renting.

I don't agree with the $650K minimum, but see your point, not the Elysium thingy me bobby. But at the moment this is a good rate for Auckland. As long as Labour cover their costs and stay below the median and average then I see no issue.

But she is only failing as she wanted house prices at $600k, now with costs its $650K, don't see the issue really. If Median prices are $800K and average is$900K ish, then building at $650K may bring average and median prices down, not to mention the other measures taking place, tighter lending, potential interest rates increases, reduced immigration, ring fenced losses, LVR's, No foreign buyers, reduced immigration etc.

As far as I'm concerned its a matter of adding as many tools to the toolkit, or smashing a sledge hammer to the dam. Each time you smash the hammer at the dam a crack appears, soon the pressure of the water will eventually do the rest.

The goal is to make housing affordable, this can all have a knock on effect for the rest of NZ.

Unfortunately - that's quite a big "if" for many.

And in reply some would simply suggest - "so get out of Auckland".

If my place of employment is any guide - many have - and our company is the poorer for it.

Motivated, hard working and disciplined couples can do it. Look at it as a sort of merit based reward system designed for the betterment of society.

Stirring stuff – however the two motivated, hardworking and disciplined couples did do it – in Tauranga.

Our Auckland based company has currently been unable to replace them.

Zachary – I’m surprised you’re surprised at the vitriol.

As I know you're undoubtedly aware - it’s in abundance in pretty much every property thread presented – no matter the starting point, nor the crux.

It's just that I would have thought Ardern's admission was an endorsement of the validity of Auckland's high house prices. The main point of contention between us is whether or not house prices are held up by fundamentals and this suggests there are good reasons why cheap houses cannot easily be built. Houses for 650k can already be built without resorting to any special initiatives.

I don’t know so much as an “endorsement” or simple resignation as to the difficulty of the task. In among this thread I think are the answers, difficult as they may be.
It will take a lot of spine and determination – along with the bludgeoning of a few sacred cows.
Test the “fundamentals” – maybe your right, but waving the white flag seems just too easy right now.

Too funny.
Since when were the only two options
$650K OR Nothing!

Nice try in reframing poor policy outcomes!

... they had 9 years sitting on their fat a*ses on the opposition benches ... and this is the best they can come up with ... FHB's have to suck it up that $ 650 000 is the new normal for a quick knock up house on a postage stamp section ?

Where's the real hard stuff , tackling the root causes of this travesty ....why do we have $-million houses in a low wage economy ... and why is immigration still rocketing along at nose-bleed levels .....

... stop blaming the useless Gnats ... and do something useful !

...and what happened to that land reform in Auckland that was going to solve the land pricing issues? It should have been a day one job. It was the only way they were going to deliver Kiwibuild on price. Seeing as they haven't, I'm guessing they can't/won't. Another broken promise.

Of course, they could do it for less than 650k. But it would require political will and a willingness to suffer the political consequences. Thousands of houses hitting the market for 600k would knock 50k of value/equity off half of Auckland's houses. That's about 12 billion gone in a puff of smoke. Homeowners vote. Vested interests pull the strings. No matter who is in power. 650K is the magic number that keeps everything stable and does not require a subsidy from the government. Just need to get the public to psychologically accept what is the required normal and dream up some creative financing options to make these houses affordable.If they ever get built.

Good comment WestieAJ. It would disproportionately impact FHBs who had recently bought, wiping out the equity that was once their deposits.

The only way they could provide cheaper homes is by building prefabs on government owned land creating a whole new class of residence that would be worth what people paid for it because of the stigma surrounding it. I really don't think we want to go down that path though.

Labour doesn't want to do that.

Is this property for FHB's when the price is knocked down by 100k? http://harcourts.co.nz/PP180309

If Labour really wanted to increase housing supply and reduce prices they would go directly to Auckland City consenting department. They would pressure on them to approve Resource Consents and Building Consents, rather than trying to stall them with bureaucracy. In the last 6 months getting either out of Council has become increasingly harder. Consents that would have easily popped out last year are now getting held up for months.

Kiwis like to believe they are somehow "duffrunt un spusshull" but it's only a matter of time before they learn the truth.