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Gareth Kiernan argues Labour’s KiwiBuild policy looks like less of a game-changer for the construction sector & housing affordability than the Govt has made it out to be

Gareth Kiernan argues Labour’s KiwiBuild policy looks like less of a game-changer for the construction sector & housing affordability than the Govt has made it out to be
Phil Twyford.

By Gareth Kiernan*

Since Labour came into power late last year, its KiwiBuild policy has been shrouded in confusion by contradictory statements from government departments and within the government itself about exactly what the policy means for the construction sector.

Phil Twyford, the Minister for Housing and Urban Development, has been adamant that “the overwhelming effect of the KiwiBuild plan will be to deliver new houses over and above what the private market is delivering.”

He has been quick to downplay the possible crowding out of private sector work. Furthermore, the government had indicated that part of the policy was to buy some properties “off the plan”, yet Mr Twyford had seemingly contradicted this statement continually reiterated that KiwiBuild would result in an additional 10,000 dwellings being built per year over and above what the market would otherwise have delivered.

The Treasury’s release of documents relating to KiwiBuild last month, under the Official Information Act (OIA), has added some much-needed clarity to the likely outcomes of the policy. Graph 1 replicates a Treasury graph estimating the sequencing of the KiwiBuild programme and the contributions from various strands of activity between now and 2022, with a total of 29,000 dwellings completed during these four years. There are two key aspects of this graph to note.

  • The pre-existing Crown building programme (presumably primarily via Housing NZ) already allowed for over 4,000 dwellings to be built during the year to June 2020. Indeed, work on redeveloping and reconfiguring Housing NZ’s portfolio has already seen the number of central government-backed dwelling consents more than double over the last year to reach a 29-year high of 1,454. Rolling up this pre-existing programme into KiwiBuild would account for almost half of the 29,000 dwellings completed in the four years to June 2022.
  • “Off the plan” purchases account for about 22% of the 29,000 dwellings over the next four years. Both The Treasury and Mr Twyford have argued that these purchases increase building activity “because these developments would not otherwise have obtained financing”. We accept that government backing for these projects will provide greater certainty and is likely to accelerate the development process. But the assumption that the projects would not have gone ahead at all, and that finance is the limiting factor on construction activity, is questionable given the strength of demand for housing and the labour capacity constraints currently being experienced.

Graph 1

Remove these two components, and the net increase in construction over the next four years looks to be a little over 9,000 dwellings (out of a projected Crown programme of 29,000 dwellings). And that figure makes no allowance for the crowding out of private sector work by the increase in central government activity – something that we see as being a substantial risk in the near term.

Exhibit 2: understating how much income you’ll need to buy a property

It’s not only the net increase in the number of dwellings due to KiwiBuild that Mr Twyford is feeling the heat about. Other OIA documents released by the Ministry of Business, Innovation and Employment (MBIE) suggest that only 25,000 households renting from private landlords in Auckland would have sufficient income (estimated at $114,000pa) to purchase a KiwiBuild home. In other words, the government could potentially get only a 50% take-up of its “affordable” Auckland properties at $500,000-600,000 each.

Mr Twyford’s own guess of a household income of $60,000pa to get into a KiwiBuild home appears to be woefully short. Let’s assume that buyers of KiwiBuild homes will be able to obtain finance with a deposit of 10%, rather than the 20% requirement for most borrowers under the Reserve Bank’s current loan-to-value conditions. Then a single person with an income of $60,000pa could borrow $403,000 from the main banks1, while a couple could obtain just $304,000. Using the banks’ calculators, and assuming a 10% deposit, suggests that a single person would need an income of $71,200pa to get into a $500,000 house, while a couple (with no children) would need a combined income of $88,400 to get into a $600,000 property.

In other words, the government risks bringing a large number of properties to the market for which there are few buyers who are realistically able to obtain or service the mortgage.

Exhibit 3: missing out important components of the overall cost

CoreLogic has also criticised the government’s assumption that it will be able to build its houses for about $2,000/sqm. Although this figure is broadly in line with the average per-square-metre (PSQM) cost of consents over the last year, it fails to take into account:

  • regional building cost variations – construction costs are higher in Auckland than in other parts of the country
  • design and architect fees and consent fees
  • costs of site preparation, particularly if the land is not flat
  • local council development contributions
  • the cost of supplying essential services to the site
  • the systemic under-recording of the value of work on consent applications to reduce fees
  • the higher PSQM costs typically associated with attached and/or multi-storey dwellings
  • the higher PSQM costs generally faced by smaller dwellings (see the last house at Is tiny living really so terrific? for an egregious example).

Although some of these costs are likely to be captured in the land price rather than the construction component of the final dwelling, the list of upside risks to the KiwiBuild costs highlights the potential that Labour will not be able to deliver on its targets once work gets underway.

The case for the prosecution

In summary, the net effect of the government’s KiwiBuild policy could see as few as 9,200 additional properties added to the dwelling stock over the next four years, representing less than one-third of the programme that is pencilled in for that period. Additionally, this figure does not allow for any crowding out of private sector activity, which could reduce the net boost to total construction activity further.

The government could also find that its definition of “affordable”, particularly in Auckland, is still not cheap enough to enable many renting households to get into their own home. Leaving aside questions about the ability of people to save a deposit, a first home of $500,000-600,000 requires a higher income than Phil Twyford has guessed.

Finally, there must be questions whether the government can deliver properties at the price points it has nominated. Any costs not properly allowed for will either make the properties even less affordable for first-home buyers or result in the government making a loss on its developments.

All in all, Labour’s KiwiBuild policy is looking like much less of a game-changer for the construction sector and housing affordability than the government has made it out to be. The policies aims might be admirable, but we think that solving Auckland’s housing crisis will prove to be a lot more complicated than Labour has thought.

1. Averaged across the online mortgage calculators provided by ANZ, ASB, Kiwibank, and Westpac. BNZ’s mortgage calculator does not have an option to run the calculations using average household expenses.

*Gareth Kiernan is chief forecaster at Infometrics. This article was first published here and is reposted with permission.

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Think about Labour's world where everyone has a living wage or above, happily live in their own home, and do not need to worry about study hard because there is no standard and do not need to work hard because getting sacked is simply impossible.

What kinda world do you call it?


The Big Rock Candy Mountain?




I'd call that circa 1960's



Or conversely Nationals world where everyone is on minimum wage zero hour contracts,all their wages going on rent of their mouldy 3 bdrm rotbox in Ranui,knowing they have to work 3 different jobs to feed their kids...whilst their landlord pockets capital gains,working for families top ups cos his accountant makes sure he has almost no income after all the tax write offs...


That's truly demented, vman.

The thing you haven't grasped about rich pricks is that it is not in their interest for everyone else to be poor. Poor people are not great customers - they're not good for business.


No one mentioned 'Rich pr*cks"...I have no problem with business folk who provide work and income for people.
It was just a response to the [ personal insults not allowed. Please stay civil. Ed. ] about "Labours world"
But zero hour contracts aren't fair and housing is an issue in this country...hardly demented.


The rich pricks thing was mine. It was a response to your ludicrous portrayal of National values.

What you don't understand is that it is Labour who want people to be poor. After all, if people were comfortable and prosperous, they'd only go and vote Tory, wouldn't they?


Oh please....this isn't the 1950's in Britain...bring out the dancing Cossaks...

Oh please....this isn't the 1950's in Britain...bring out the dancing Cossaks...

In many ways, NZ thinking is still walk shorts and knee-high socks.

Don’t diss the walk-shorts, knee high socks gen - they were the nation builders!


I can think of 2 reason why rich people wants to keep the poor poor just on top of my head. They think that when a person is poor hunger will drive them to become obedient work slaves for them to exploit. And poor people will not be able to compete with them on resources or goods that is scares or rare thus they get to keep all the good stuff while the poor scramble for scraps because it is what they could afford.

It's a fine line. Poor enough to be subservient, but not so poor as to be rebellious.

That's why you sell to other rich pricks and milk the poor like they are slaves. You clearly haven't attended a National Party planning meeting recently.

They don't need them for customers, they took a short cut, became their landlords and helped themselves to the bulk of their income up front.


What you have failed to grasp are some facts. BearBear's comments below are relevant and to educate yourself,i suggest that you do some reading;try the Spirit Level by Wilkinson and Pickett and Saving Capitalism by Robert Reich.

You will find that inequality has risen exponentially and those who have benefitted the most have been very active in altering the rules to make sure they just keep getting richer.Your case is badly flawed.


A household income of $60k is barely enough to pay bills and buy groceries. What planet is this guy on?

Perhaps he time travelled here from the 1970's?


Perhaps slightly overshadowed by the prefab industries estimate that they can deliver 70% of KB, after surveying their members. See Stuff here and Granny H here.

It's exactly what many of us no-skin-in-game common taters have urged for a decade or so:

  • Multi-proof consenting, so dopey TLA's are excluded except for services and founds
  • Modular construction in factories under cover. No mo' (cue drum roll) occasionally drug-tested hammer hands clonking together frames in the always tropical Awkland weather, then leaving them to mature in the rain for a month or three as if a fine cheese.
  • Standardised designs so that architects and other fashionista cannot foobar weathertightness by insisting on the material or look du jour (remember Columns at the front door, and no eaves?)
  • Small, warm, and a low per-square cost achieved by the economies of scale engendered by a few well-configured factories running at full tit, not a thousand two-bit 'builders' who need to pay the lease on their DC 4WD ute, the boat, and the other toys.

The fly in the Affordability Salve is, mais naturellement, the land price........

But wait there is more - there is build-to-rent coming your way:
so now trying a new committee:

However, not everyone thinks that KB is feasible in its current form:

The author summed it up quite nicely "The policies aims might be admirable, but we think that solving Auckland’s housing crisis will prove to be a lot more complicated than Labour has thought." .... lots of ga ga, spins, and feeding the public ton of BS and changing stories with little thought ! = naive and amateurish policy making = voters disappointment = collapse of trust in a lot yet to learn how to work the ropes ....
God save NZ

It doesn't matter if the new houses aren't themselves affordable. Their additional presence on the market will force down the price of any existing house that's around or below the same level. This is basic supply and demand economics

that is if they can build similar houses to the surroundings at a competitive price ... but the Gov is building complexes 'with Townhomes and apartments ( not houses) and mostly these are already available at reasonable prices on the market now - in the above report, there is no reason to believe that the Gov will be able to build them cheaper .... they sound like they will make a breakthrough but there will be little achieved.

time will tell ...Focus on the unintended consequences in the next few years.

Not if the additional KB houses are seen to be less desirable / valuable than the existing houses in the same price category.
Presumably this is what Labs meant when they promised to increase the supply without bring the prices of the existing stock down. Let's do it !

If the KB houses are "seen to be less desirable/valuable than existing houses" then their price will have to be reduced. Either way, the result is an increase in the number of houses available for a lower price than $600k

" Either way, the result is an increase in the number of houses available for a lower price than $600k" - this is true of course - if more houses are built , more houses are available.
Does not imply your original point which was that the prices will inevitably come down as the consequence.

How does it not? If KB homes are less desirable then price will come down, someone (government) makes a loss on them but they still exist. Their existence and occupancy means that less people need the existing stock thus less demand and therefore implying lower prices? It's not like there is zero crossover between KB stock and the existing stock regarding demand for them.

So not only are we bottle necking production to build crappy houses no one can afford tax payers will need to subsidies people to move into them. Well done guys.

And a loss to the Govt paid for by taxpayers so effectively a subsidy to the purchasers, perhaps this is Labours real policy.

Looks like we will end up building Auckland homes for the few who can afford buying a $600K 2 bdrm 60-70m2 apartments ... and $700k 3 bdrm 90-100m2 townhouses . .... The unsold stock will either be sold to long term investment projects ( O/sea or local funds) or be managed by the Gov themselves ... which is going to be a MESS.

On that note, build-to-rent projects could add 5000 rentals in the country in the next 10 years ( the like of pigeon holes I saw in Hobsonville which are only suitable for single people or very young couples, built in a Student housing type crowded buildings) .... These will significantly increase Rents in coming years, not only because houses will be the only accomodation suitable for families, but because multinational funds need to see that magic 10% profit on the bottom line each year .... expect more wisdom from Mr Eaqub about renting in the coming years "looks like he is playing the role of an advocate for Renting again in Select Committees while looking after his investments in Hobsonville "


I finally agree with this guy, the whole kiwibuild concept is a joke and a complete waste of tax payer’s money.

Less money for you ay? You want the government to keep upping WFF because you can keep your snout in the landlord trough... rather then them spending the same mount of money on hard working kiwis, who can't get ahead because of people like you ripping off every last cent they have? Your attitude is despicable and selfish in the extreme....

Hahaha, 100,000 homes in 10 years, no chance! How many have they built so far? None!

100,000 per year is 192 per week, good luck. LOL

A hundred a forty days into a new government and you are asking that question? How many houses did your nat brethren build? You just want to suck every last cent from hard working Kiwis.
To me, landlords bludging money at the levels they are, are no different from common old bag snatchers who target little old ladies.

Explains why no one asked what you think, just saying.

Its actually 10,000 a year and based on a 48 week working year is 208 houses week.


waste of taxpayers accomodation supplements being raised to go straight into landlords pockets.
How about a completely level playing field,no WFF's,no accomodation supplements,no tax breaks for landlords...

Yep. Deleveraging would kick into gear pretty quickly. Unfortunately, consumer spending would be decimated as the emotional hangover sets in. That's the problem will bubble economics. Once you create all these market distortions to keep things purring along, you can actually make the situation worse, which is exactly what is happening in Australia and NZ. Economically, both nations have doubled down on house prices.

Good points JC - really short term thinking. Long term these issues will need to be addressed. Question is, how long can we avoid facing them before they come back and bite us?

Shall we crowd a one ticket to North Korea for you.


Solving Auckland's housing crisis is indeed more complicated than Labour thought, and as long as they keep letting 45,000 odd people into Auckland each year, it's impossible.

So the only way to fix this thing is to do nothing because doing something will do nothing? So the government doing something, is going to produce the exact same results as the nat government doing nothing? But by doing nothing, nothing will be done either? The mind boggles....

Exactly least they are trying something...9 years of heads up a**es saying there was no issue.
The new leader even admits it:

The new leader of the National Party says there is a housing crisis but only for those without a home.

In his first full day as the opposition leader on Wednesday, Simon Bridges was pressed by media on his regrets of the former National government and whether there is a housing crisis.
"Is it a crisis? Yeah, for some it is. For those who don't have houses it is a crisis," he told RNZ.

So doing something silly is in some way superior to choosing not to do it ?

Building more houses is silly?
I have spoken to players in the industry,they look forward to long term partnerships where they can commit to building long term in big numbers,not the ongoing boom,bust we have now.
If things are so great as they are,why so many building firms going to the wall.

>If things are so great as they are,why so many building firms going to the wall.
NOT due to lack of orders from the state. Many reasons , planning restrictions being one of major ones .

It is pretty clear from comparing Lab promises to reality that they have not got a clue. They are certain to make the problem worse .

Best we just wait and see...3 years and we can all make our minds up...bit early to be judging them.

Oh, we will wait the 3 years for sure, but we shall run our checks quarterly, or everytime there is a new spin to dilute the promises which fooled a lot of people into electing them in the first place .... and make sure the stock is well counted by year's end so we can hold the manipulators to account.

Taking office by deception is anything but Honest.

You can run your checks every week...but you will still be waiting 3 years...and as capital gains dry up,tax breaks disappear,slowly the property ponzi will unwind and become less attractive....the 2 bedroom hardie plank mould producer on a cross lease in Clendon will be worth half the price paid for it when compared to a well built state backed home built to code....then the banks will be wanting a little chat about equity ...

Well done ... you just proved to everyone here that you know very little about property values .... 3/4 of that Clendon house price is the LAND ...... sorry, fifth form economics is too simple for solving this one ...ask around, you may change your views

more like 3/4's of that price is sentiment and the thought that it was going to be worth more tomorrow than what it is worth is worth what someone is prepared to pay...basic economics...

It seems a rather cruel fate to wish upon the recent first home buyers of Clendon.

Sad but true...I do feel sorry for anyone that ends up being collateral damage now that the music has stopped.

Ranui as well, I was shocked when one of my mates being very desperate got sucked in and brought his first home there..... he has 2 young children and I pray that may shite never hits the fan because if it does it will be hard for his family for years to come...

It gets hard to reason with folk who benefited from such government efforts but now swear black and blue such things a) have never benefited them, and b) cannot be done, no where no how.

It is for Labs to prove that they can deliver what they promised. The article shows that the Treasury does not believe they can even get close to that . It is the Treasury folks you are accusing of having benefited , not recognizing it et..etc. - just to be clear.

DOES, your view implies you think the nats did a good job at providing for NZ CITIZENS. Is that indeed the case?

That is a separate discussion from the current topic - which is that Labs made entirely unrealistic/false promises and will fail to deliver on them . Glad you are not disputing that.

How do you know that? Are you able to look into the future?

This is the Treasury view . They are not able to see the future- but are better at forecasting than most people.

Really? How good have their predictions been over the last 12 years? 80% of the average Joe punter on this site have done as equal or better job then they have.

You still owe me a beer Blue Meanie for betting that National will be able to govern alone

Sounds like betting on the opposite of what you think might be a strategy =)

Yes you have to look at the future being generous at 208 houses a week even on a 7 day working week that approx 30 houses a day so by the first 100 days in office Labour is 3000 short of their pre election promises so my money is on the Treasury being closer to the eventual result than yours or Labours. If you are confident you are right bet the farm and I guess the bookies would offer you of odds of 10,000 to 1!

Pretty much sums up the thinking. You notice that they’re not debating the guts of the article. Taxinda said homes for all. Maybe she believed it but her error was in relying on feckless Ministers to make it happen. This Government is akin to a Student Union playing with sudden riches (our money).

Yawn. Cough. Yawn. How much more have you been taxed girlfriend? Seriously, tell me about how much more ‘Taxinda’ taxes you? Ok, let me tell you. You have been taxed nothing,not one single cent more than your beloved nats taxed.


False. Labor repealed the tax cuts that would be in place this year ( ok - that would only compensate for bracket creep ) so are already taxing us more than Nats would have.

looking at it positively,if you have bought specuvestor property in AKL in the last 2 years,you shouldn't have to pay the brightline tax in 5 years as the property will still be worth the same or less,so in a sense you are being taxed less :-)

Tax cuts? This country can’t afford tax cuts. The tax cuts nats offered was a round about way of giving landlords more hard earned Kiwi money for doing nothing.
The repercussions of the nats balancing their books by cutting funding to health, police, housing and infrastructure etc will be felt for generations. If you care to open your eyes in Auckland traffic, or try and find an oncologist when you have testicular cancer or need a policeman quicker than in an hour, you might see it. I know you do, but what you have is wilful-blindness. Goggle (yes I know) it if you don’t know what it is.

Your statement was that Labs are not taxing us more ; now that it has been shown to be false you promptly switched it to " yes they are and it is a good thing" - have you ever managed to hold on to a thought for longer than a few minutes at time ?


"This country can’t afford tax cuts."

If that is true how will we afford
- 1 billion trees?
- 100k houses?
- free tertiary education?

We could afford a lot more if most of our taxes weren't wasted on electoral bribes (that we all know will never happen)

Ironic, you proved my point by not tackling the points made by the author. As for ‘girlfriend’ nous n'avons pas gardé les cochons ensemble.

what I said to your mate paas haas. You got nothing.

So being called ‘girlfriend’ so offends you, you launch into an offensive rage in another language. Take a chill pill mate, I was being sassy... you don’t have to take this so seriously. Besides, girls are just as amazing as boys... actually most are more so then the grumpy old right wing conservatives on this site. :)

Third form French. It’s not an offensive rage, it means that we aren’t not ready to be informal.

lol, exactly Ex Expat ... some are wise, some are otherwise , as they say !!

LOL (✿◠‿◠)


No, the way to fix this thing is to actually do what National tried and tried to do, but were opposed at every step of the way by Labour etc.

That is, to fix the planning system which makes it effectively illegal to build an affordable home in Auckland.

Once the private sector is actually allowed to build houses at reasonable cost, they most certainly will.



"BCITO currently has 11,000 apprentices in training across 15 trades, with 8500 of those carpentry apprentices. That's around 20,000 short of what is needed."

You mean to say, that actually the pre-election propaganda may not come to fruition. I find this hard to believe, don't parties always do what they say........surely they weren't buying votes!

God forbid ..NO !... we don't do that in NZ .... we just promise the earth, get few marketing gurus to drum up a noisy campaign and get carried away without any future accountability !! ... Do the same close to the following term and scramble a bit more lollipops ...

Noooo...just ask Simon 'Build no bridges" from the previous election...

1) Drop the immigration rate down to something sustainable. Its mainly the land price that has been rising. Construction costs should generally match inflation

2) Reduce housing prices by removing the developer contributions & apply them as targeted rates. Its the users that create the service demands, not the developer.

3) Government need to find more capital. Its going to have to resort to leasehold land and rent to own to make serious progress which requires deeper govt pockets.

There was an interview on RNZ this PM today

Interviewee expressed concern about the inability of the Civil Service to scale up to speed in order to meet the dictates of the Labour Government. The view is the National Government underfunded government departments with the loss of too much top talent. Labour have inherited a poisoned chalice.

While there is a will there is not a way. We can expect to be bombarded with screeches of delight from the choristers in National chior

Let's do it ! ( or rather fail to do as usual it and blame it on the Nats as usual)

LOL, " National Government underfunded government departments with the loss of too much top talent. Labour have inherited a poisoned chalice."

So National knew it was going to lose years before the election so it started poisoning the Chalice .... even the most naive sheeples won't buy that sort of nonsense ... !!

This circus is getting funnier by the minute !!

And you are one of the head clowns...where did they say Nats knew they were going to lose...only said that they were most hospitals and essential govt services would say,especially with the rampant immigration without a corresponding increase in spend on infrastructure...

If Govt departments had so much talent why was so much spent on contractors and consultants - answer because the bureaucrats were either unable to deliver or not prepared to be held to account so losing them was probably a benefit.

Prefabrication of Houses

The Prefabricated Housing Industry says it has the capacity to deliver 7000 homes a year, now

That is probably on a single shift basis. Off-site Factory fabrication can be geared up to 3 shifts of 8 hours each shift or 24 hours per day which can't be done in on-site conditions.

I suspect they have greater capacity than 7000 per year

Ironic, but sad. So most of the houses Labour are likely to actually build will be ones that National were building anyway. In much the same way that the low government debt that National inherited was due to the previous Labour administration's rampant promotion of household debt. You can't make this stuff up.

So, do we get a repeat of the last Labour government's achievements? Which was to add $110 billion or so to household debt and $6 billion to government debt, while achieving the clever goal of pushing house prices up by 100% nationwide. Not realising that this was an own goal, making the country poorer by selling more of it off.

Or, a repeat of National's slightly lesser (but more inexcusable) own goal of only pushing up house prices nationwide by 63% and running up government debt by $45 billion and household debt by $80 billion? Again, making our country poorer and more crowded and more indebted.

They all seem to worship the same false gods of gdp and immigration and "attracting foreign capital" and rising house prices to keep the people in their place. Paralysed and hypnotised by the droning incantations of the economists and bankers. Deeper in debt. Debt is Good. Deeper in debt. Debt is Good.

Both are just as culpable but National had the benefit of hindsight after labour’s mismanagement of the housing market, campaigned on it and then denied it for 9 years. But that’s okay?

As I said, more inexusable. For the reasons you mention. Having said that, yes I am biased towards National and against Labour. National should have done better as they ought to have a better grasp of reality.

" Denied for nine years" ??? - no one could recall having a housing crisis until 2014 when prices started rising sharply and went beyond the budget of a certain class of workers and low income families.

The same problem existed in 2007 peak ... and when house prices dropped by 10 - 20% during GFC no one wanted to buy/touch them. .. Most (like the same silly unwise " DON'T BUY " advice being pushed here today) was floating around in 2010 and 2011 by semi-economists and tire kickers a year after the market started recovering...

So the ones who missed the boat want it to come back and just blame the National Gov for doing it over 9 years....!!

We are all looking forward to the Coalition Gov lead by NZ Labour to correct this issue.

After 6 months in power , All blames of the past could only be considered as putting up excuses for the failure of the current Gov ...

We don't need crocodile tears or pitying the poor, sick, homeless, and vulnerable people from any minister of the crown.

We need to see action on promises made on the election trail ... they have the Power and the Money to make the promised wonders happen ... so no excuses.!

Accurately said Eco Bird !

After 6 months in power , All blames of the past could only be considered as putting up excuses for the failure of the current Gov ...

Six months seems reasonable. Nick Smith trying to blame Labour as late as June last year (in the house)...that's a bit too far, when you've been in power for three terms.

Might be time to start extending your standards to both parties, Echo Squawk.

I see from the authours bio that he is another economist with a lot of life experience:
"Gareth’s management experience at Infometrics has given him a good understanding of how economic issues affect business decision making and development. Gareth joined Infometrics in early 1999, having graduated from the University of Canterbury the previous year with a MCom (Hons) in economics and a BSc in economics and statistics. He became managing director of Infometrics in 2006, and moved into the operations director role in 2014."

I see that you are unable to argue with the substance of the article ( which simply highlights Treasury opinions ) so you decided to try and attack the author. Unlucky for you he is not a baby boomer so that avenue is not available. hence this feeble attempt.
He has as much life experience as Taxinda does BTW. you say "treasury opinions'...also known as guess work.
Difference is Jacinda is running the place...
I am a baby owner in central AKL,6 figure that avenue is not open to you...

LOL, a dinosaur which knows nothing about the subjects in discussion here - owning a house and getting 6 fig salary does not substitute for grey matter .....

So , Treasury opinions are guess work now ?? ....LOL

As per my last comment in this page...sticks and stones...dinosaur,no grey matter?
Merely pointing out the assumption that I was going to blame baby boomers...
Don't judge people when you don't know them.

Perhaps you could put some of your 'grey matter' to work and tell us exactly what you would do to improve housing etc in AKL?
Every body is keen to throw rocks,but no one has put up any viable alternatives.
The new coalition (thats more than 50% of votes) has already achieved a lot...sentiment has changed towards housing as a one way bet and in doing so,property has already become marginally more affordable.

Relax and enjoy life.

Yeah, relax vman, you have proved my point several times with these comments - I did not judge you but pointed out how wrong you were.

Solving the housing market is not a Duel between two contestants as your are trying to frame it - the new coalition is practically the Labour party, the others will just work in the shadows and cash the monthly cheque.

The new Gov has all the sticks but alas it is threatening to use it on the solution rather than the problem ( which are mostly their Mates and current regulations)

I am relaxed thanks eco bird...I am agreeing with you,it isn't a duel,I am happy to sit back and let this lot have a go for 3 years.
I am not sure what point you are trying to prove,except it seems you are in every property value related forum in here spruiking up the market,I could care less,my eggs are in many baskets,I just come in to fire a few shots for amusement,cast a line,see how many ya reel in.
The tone for going off topic and going crazy on the labour Government was set by xiamowang's first comment of the thread

Good for you , same here ... I am not "spruiking up the market" have no interest in that at all, I have enough properties and investments, do not need to sell, or do not intent to buy anymore ( unless it is a bargain) .... rental investment is my business and it is only natural to closely follow your industry ... correcting false claims or voicing out own experience and market factuals is anything but spruiking up the market ...

Yip, all you gots to do is raise them rents to keep your ‘envious’ lifestyle going. After all, it’s just business getting all the hard earned money you can from real contributing people. Then you can make yourself feel like a real achiever by skitting about how many properties you own. How do you say it? “LOL!”

S**t, that's a good idea ...maybe I should too eh?- thanks

Its really easy. All this supply nonsense is just there to take the focus off Demand, which is the real problem. Actually obsession is probably a better word than demand.

The coalition need to show some balls and attack demand head on. I have no doubt it will throw us into recession, but we are heading there anyway, its either slow asphyxiation or firing squad.

A fundamental problem is the obsession with home ownership. In my opinion the govt would be better placed building (and renting out) housing as a layer above social housing (ie. it would be market rate govt rental housing). This would help address not only supply but tenure security

Why do you think the government is a better landlord? They may be, but they may well be worse. Do you know from experience?

No I don't know from experience. But at the very least they could lead the market by example in terms of tenure security.
Also, there is a more basic issue here. The market simply won't build enough rental housing. Market failure at play.

Well, I share my experience and totally disagree with your views .... have a look at the housing intensification zones created in Hamilton city (not sure( but I think it was 8 years ago or so ... the council allowed zones where private sector can demolish old houses sitting on 600-800m2 prime land and build 3 to 5 , 2 or 3 bdrm units from 70 - 95 m2 each -- All built by private developers and sold individually as unit titles ....the whole area of Dinsdale and Frankton have quadrupled in home numbers .... A lot of these units were leased by HNZ for 5 -10 years ....the majority of these are rentals but they are mostly single level brand new and have all the mod cons to make them pleasant homes.

That is impossible to achieve in Auckland because of council zoning , high contribution costs, and other expenses - in short the ACC is forcing developers towards 3 story buildings or apartment blocks to make it worthwhile to develop and invest, i.e. most of the Unitary plan is a farce too... and just pushing sprawling out of centers where land could is more reasonably prices ... and the nearest you can get now is in Wellsford !!

So it can be done and were there is a Will and grey matter there will always be results.

Some will say, developers and investors who bought these and rented them have made a lot of money - Well, that is the incentive for long term development and investment which leaves the Gov to take care of its important social obligations .

Hence, instead of tightening the noose around developers necks, demonising landlords, and create a stupid toxic environment for political gains, Maybe the Gov should show us how it is going to fix it by itself !! ... currently it is knocking on every possible door to rescue them from the hole they promised to plug

Every landlord's dream is to have long uninterrupted tenancy in his rental for years - that saves him money and no one I know would replace a good tenant every year so he can increase rents - that is completely disconnected from reality.

there are some bad apples in the industry just like in any other, and they are rejected and condemned by everyone ... so amplifying these cases and presenting them as a trend ( like they did with homeless people) does not serve the common good.

The number of homes in Dinsdale may have qaudrupled but the desireability of Dinsdale as an area to live in has diminished sharply.

so, will investors, en masse, accept rental yields of circa 4% on new build apartments?

I wouldn’t if I knew new apartments would be coming on the market every year at the same purchase price as depreciation would truly be a cost.

They could, can, and will build 80-100 square metre houses the private sector won't

So, nothing like "I, Daniel Blake" ever happens here? Only in other countries.

I’d imagine there’s less of a desire or need for a government to chase more and more profit, e.g. state housing at $50 a week. So less people will have to pay through the nose to a landlord.

I think it is a much better way to do it, we are getting into a nasty situation now with the haves and have nots and the growth of inequality and now with a huge number of kiwis quite probably never even being able to own. It is a toxic culture that is coming out of the nonsense that has been housing in this country for the last 3+ decades. Co-operatives and such where tenants have shares would be even better, so that even if people never own outright they are able to have some stake in housing. The way we rent houses in this country is ghastly.

They have not been until recently- this from the HNZ 2016 / 17 annual report

As a result, we’ve now upgraded over 25,000 of our
homes to our Warm and Dry standard,

prior to 3 years ago very few HNZ properties met that standard - huge program instigated by National - supported by greens - over 50 000 homes upgraded in 3 years -

But essentially this means 3 years ago almost 75 000 properties- virtually their entire portfolio - were not fit for purpose - Warm and Dry -

pretty sure the government is not the better!

What I would really like to hear from all the naysayers is some actual real world answers to how they think things could be improved,rather than this stupid Reds vs Blues rubbish,he said,she said,name calling like 'Taxinda..'

You won’t get it here. I swear they’re like Rugby fans.

,rather than this stupid Reds vs Blues rubbish,he said,she said,name calling like 'Taxinda..'

The sheeple prefer to associate themselves with groups usually based on emotional attachment. It's all part of the socialization process. That is why the Hosk appeals to much of middle NZ, whether you love him or hate him.

See my comment upthread, vman. There's a practical way through, at least for the builds. Now the land, the servicing, the bare-land-development role - that's where the plot thickens......because that's the natural monopoly territory of Awkland Council.

Good luck, and pack a lunch plus waders. It'll be a long slog through That swamp.

Hopefully the new spirit of cooperation will bear fruit

Haha good luck. This website is the cesspool where these reptiles come for their daily circle jerk.

Any reasonable attempt at discussion is immediatly drowned out by their foaming rabid nonsense.

Technically, it’s impossible for reptiles to get rabies, but we get the gist of your post.

vman, I'm an Architect having owned my business for 18 years, I have designed and built many, many houses. Sadly I have bad news for you.
The only affordable houses that can be built are in areas where most people don't want to live because of the land cost component. No problem building affordable 100m2 houses for $350'000 if the land costs under $100'000 which is actually the case in many places in NZ, but not where there's a housing shortage.
Then, there's the problem of scale, we do not have enough builders and tradies to build an extra 10'000 houses pa, nowhere near it, also if we're going to build new "satellite suburbs" there's the huge cost of infrastructure, roads, water, power, fibre. Finally, if such a building spike was somehow possible, it would make building materials even more expensive...

I’d like to see more innovative forms of sharing existing dwellings e.g. my house is theoretically divisible into two dwellings under the same roof. When the children have moved on I could be incentivised to form a new dwelling out of the space they occupied and enter into a sale or long term rental of it. As long as the human loading on services is unchanged I’d expect no greater rate burden for the property and the income to be tax free as long as the property was owner occupied (similar to boarding and recognising that I’m providing a social benefit).

Yvil, the most sensible comment I have seen on here for ages. The rest of this just turns into a personal bun fight. So basically your saying there is no short term cure, which is the same as its in the too hard basket so subsequent governments have just kicked the can down the road.

Carlos67, thank you for calling my post "the most sensible comment I have seen on here for ages"

If anyone can Phily T can! The boy done good.


Phil “the tool man” Twyford

I think most people know that the government cannot build nowhere near 100'000 affordable homes in 10 years. The current government got elected on a promise they cannot fulfill because either:
1) They thought it was a great idea but had no idea how to make it happen and they didn't bother to look too closely into it, which is very negligent, or
2) They knew they couldn't do it and still claimed they will do it, which is very dishonest

Yes - but never mind all that . John Key is the Satan - OMG you did not know ?

No matter how you slice it .... Both actions and intentions are deceiving the voters ... Their propaganda machine ( and some of the fools who repeat the same lies in social media) have blown this out of proportion .... now they have to stop digging and find a way out of this giant hole ... They will go back and dig every project that National started or planned to Claim as their own achievement ... this is typical labour!

Makes us wonder , where are the rest of the coalition partners, why have they gone in ground ( or Bush) and no one hears anything from them ? Where do they stand on this fiasco of deception .... I wonder if they discuss these issues honestly behind closed doors in cabinet meetings or they keep their heads down to cash the monthly cheques for now ...
One would have thought that the Greens would be up in arms if it was National doing this
sort of blunder !

Taking credit for a previous government's projects is standard fare for both sides, if that happens. Recall National trying to take credit for the Waterview tunnel that Helen Clark signed off.

However, should Labour try and fail, it's still more ethical than campaigning on a housing crisis then denying any crisis exists for the next nine years, and calling it "a good problem to have".

It's indeed a big and difficult target to achieve, and there's a good chance of failure. But people like you making these sort of comments were probably lambasting JFK for exhorting NASA to aim for the moon.

(Or consider the moon landing faked. Which would not actually surprise me that much. I'm sure if Labour achieves their 100,000 houses in 10 years there will be plenty of people claiming it's fake.)

Wow, I remember when you could actually have semi-measured and intellectual discussion on this site, even with opposing viewpoints.

Now it's pretty much a mirror of american style politics....

A completely screwed up and extreme binary construct with nothing in between - you are either "A Team" or "B Team"...

And each on a soapbox screaming at each other with hands over ears...a bit like my 2 young boys...

Don't think I'll be wasting my time to check in here anymore - there are some pretty vile keyboard warriors lurking on here, most with wayyy too much time on their hands.

It isn't helped by the recruiting behaviour looking for upticks. This post from vman received 17. Hardly a signal that the readers want restraint

"Or conversely Nationals world where everyone is on minimum wage zero hour contracts,all their wages going on rent of their mouldy 3 bdrm rotbox in Ranui,knowing they have to work 3 different jobs to feed their kids...whilst their landlord pockets capital gains,working for families top ups cos his accountant makes sure he has almost no income after all the tax write offs..."

Ex Expat...perhaps you should look at the very 1st post in this thread....absolutely nothing to do with the subject,so I threw out an equally ludicrous over the top counter argument to highlight the craziness in here,get a few bites....and sure enough....caught my quota

"by xingmowang | Thu, 08/03/2018 - 14:44
Think about Labour's world where everyone has a living wage or above, happily live in their own home, and do not need to worry about study hard because there is no standard and do not need to work hard because getting sacked is simply impossible.

What kinda world do you call it?..."

Perhaps we should look even earlier as to where the tone for some of these 'debates' comes from...
Try the clickbait headline "....pulling numbers out of your a*#e..."
Hardly an entree to an informed debate....sounds like a throw away line at smoko arguement between blue/red

Fully agree, mvgsmf. I've wound right back, I never feed trolls, and yet the faeces fly.

I think a tag, applied in the course of moderation is the key: any comment that's ad-hom, appeal to authority, or any of the many other fallacious arguments could attract a tag that spells out the flaw-du-jour.

Then, if us common taters could set a personal comment thread filter which excluded nominated tags, we could read the threads, faeces-free. Ish.

Freedom of commenting is thus preserved, while those of us with limited time and a concern for our neurons, could avoid the lower quartiles. Or, for laffs, take off the filter every now and again.

How's aboot it, Interest?

This bulls%*&^ that everyone would be given an affordable house to buy in Auckland was a lie , sold to a gullible electorate , who along with this exciting prospect , as well as free tertiary education and Jacinda -mania went to vote for Labour.

Are they in for a reality check when they were realize they were conned ?

The awful truth is that residential investment in rental stock is now officially discouraged ............ so this will lead to even less houses to rent .

Boatman, you are totally correct in what you say and anyone with intellect will realise this.
The ones that don’t realise this have blinkers on and it wouldn’t matter how convincing your argument was they wont beleive you.
You can’t really blame the coalition for their promises because the truth is that they are idealists that haven’t got the necessary knowledge nor business skills to carry through with their policies.
The voters will realize that they have made one big mistake voting for them.
What have they actually achieved for the betterment for the country since they have been in power?????

Now that National have disintegrated as a party I can now only see Labour as having at least another term in power. Roll on good times in New Zealand for everyone.

At risk of being accused of throwing petrol on the fire,TM2,the inference that only people with 'intellect' will realise is some what denigrating to much of the population.People voted,they wanted a change,it may be for the better,maybe not.Time will tell.A lot depends how you measure success.In many ways I would have liked to have seen Bill get in,his approach to social investment could have been interesting,even Simon Bridges has now admitted there was issues around housing.
In a perfect world we would have a parliament that utilised the combined talents that undoubtedly both sides have to work together rather than this adversarial points scoring system we have now.
I think you would have to agree that both sides of the house have their stars...and those that shine a little less brightly.
As of 1st April,the minimum wage will increase,that might not interest you,but for many on the bottom rung,this will be a little improvement in their lives.
I suggest everyone takes a chill pill,trys to be a little nicer to each other.
If we are all honest,most people have some vested interest in the point of view they put across in here,unconscious or conscious bias runs deep...

Vman - you talk of it being great for the poor as from 1st April the minimum wage will increase. If you view this through the eyes of a darklord, they think, well that money should be mine....if those poor people (who chances are will be renting) are getting paid more, then therefore I must be entittled to increase rent....(this is actually how I think many property investors see the world - they see dollar signs and not people).

Yes,unfortunately it will probably be the case,I know from people close to me that the increased student accomodation allowance is being factored in by Wellington landlords.
As Racheal Hunter said,it won't happen overnight....but it will happen,I just have to have faith in human beings that by changing the mood and culture of the the nation,perhaps having us think about our fellow man,that haves may leave a little for the strugglers.
It has started slowly,but people aren't piling into rental investment due to the various disincentives being introduced,there will be pain unfortunately,but as the rate of properties changing from owner occupied to rentals slows,prices have stabilised,people will see a chance for their future,a possibility to own their own home.
So many variables though,world economy and most importantly the ozzie economy,if that takes off again...many will head off for the bright lights over there again.
People under estimate how the difficult conditions over there changed the migration patterns of kiwis.

Absolutely - I find it funny when people (generally bullish on property) say its all about supply and demend and they think that the current supply/demand situation is fixed and will never change....i.e. there is strong demand now so therefore there always will be, but you can't apply that factor infinitely into the will change...its just a question of when/why and how will it change? As you say, as recession here and strong recovery in Australia would certainly have an impact.

Yes,slowly but surely,another thing to factor in is the unwinding of the 'low quality' education sector...also known as back door immigration.As these 'courses' disappear,so will the students that require will be like turning around a cruise liner,it may be imperceptible at first,then all of a sudden,there is a realisation your are heading in a different direction.

What's a darklord?

National completely stuffed up their election strategy and therefore do not deserve to be in power. They went for Winston's jugular and were even as stupid to make sure he lost his Northland seat. No one has a bigger ego in New Zealand than Winston and one can only imagine how bad he felt when he lost his seat and just how angry he was. Hillary Clinton would have some idea of his anger and disappointment. And then National thought they had won on election night. And they have ability? Labour has the ability in fact and far more than National. They ran a good election and then made sure Winston was on board. No one can run New Zealand worse than National did for its three terms. Boomers like myself did well but those who were just getting on the property ladder were completely stuffed by National's denial that rising house prices were a crisis. And for the record I voted for National. More fool me.

Gordon - I wouldn't just say election strategy - I'd say strategy in general. Reminds me of that Abraham Lincoln quote that 'You can fool all of the people some of the time, and some of the people all of the time, but you cannot fool all of the people all of the time'.

I used to be a National supporter - but the last two terms of the Nats, the policy and supporters appeared to be mainly fixated with self interest as opposed to a sustainable utilitarian view......That imbalance was never going to be able to last long.

Basically National became the 'Rob Peter to Pay Paul party'. And now that Peter is struggling National are out, so now we have a 'Rob Paul to Pay Peter party' in Labour.....who would have thought? Why not avoid the shifts and find a more balanced and equal system where Peter and Paul aren't robbing one another?

Amen to that ...

Gordon, I would’ve thought that you would’ve said my ego was the biggest in NZ.
Look, I would love the coalition to know what they are talking about, but you only need to Listen to Mike Hosking rant abgout Kelvin Davis not being able to answer any questions about anything and he is currently running the country with Jacinda away.
Transparency that she ran on is just rubbish.
Watch them self destruct and people,turn against them with their nillness and lack of knowledge on everything.

lol....yes. it is hilarious, the boss left the clueless bodyguard behind to hold the fort for few days...I guess, he is doing the best he could and avoids being told off again.