Getting 4000 homes on the first KiwiBuild site at Mt Albert may not be as difficult as some people are making out, and it could be a godsend for the banks

By Greg Ninness

The Government’s plan to build 3000 – 4000 affordable homes adjacent to the Unitec campus at Mt Albert in Auckland has not been out of the headlines since it was announced two weeks ago, but so far the only dirt that’s been moved for the project has been the mud being slung by its detractors.

The project is the first stage of Labour’s KiwiBuild scheme, which aims to build 100,000 affordable homes over the next 10 years, so it was inevitable that such an ambitious policy would be drawn into the political mire.

The main claim made by those opposed to the scheme is that the site is too small to accommodate 3000 - 4000 homes, and more recently, that if that many homes were built, they would probably be so small that the banks would be reluctant to provide mortgages to people wanting to buy them.

So how do the numbers stack up?

It could be next year before definitive plans for the project are finalised, but what we do know is that much of the planning for urban densification in Auckland has been based on providing low-to-medium rise terraced housing or apartment blocks 3-5 storeys high.

So it’s probably a reasonably safe bet that that type of housing will form a significant part of the Mt Albert project.

Because the government wants to keep the housing affordable for first home buyers, individual properties are unlikely to be large, but that doesn’t mean they need to be tiny either.

If you assume a basic footprint of 50 square metres per unit in blocks that are three levels high, you would be able to get a 100 square metre, two bedroom unit on two levels, with a 50 square metre one bedroom unit above or below it, on 50 square metres of land.

Parking could be in the basement.

Using that template, 3000 units (1500 x I bedroom and 1500 x 2 bedroom) would require 75,000 square metres of land.

If 4000 units were built, split evenly between one and two bedroom units, they would take up 100,000 square metres.

The entire site covers 29 hectares or 290,000 square metres.

 So under the above scenario, the buildings would occupy between 26% and 34% of the entire site, or roughly a quarter to a third.

If the height of the buildings was increased to five storeys, which would allow say 2 x 2 bedroom units and 1 x 1 bedroom unit per 50 square metres, then the amount of land needed for the buildings would reduce to 50,000 square metres for 3000 units and 66,700 square metres for 4000 units, or between 17% and 23% of the entire site.

Therefore the idea of fitting 3000 to 4000 units may not be as much as a stretch as some people have been making out and they would not need to be shoeboxes.

Nor would they be slums.

There are plenty of good quality two bedroom apartments already built in Auckland that are under 100 square metres, and plenty of one bedroom ones that are less than 50 square metres.

And when they come up for re-sale they tend to be bought more by owner-occupiers than investors looking to rent them out.

Which means there’s already a proven demand for this type of property in Auckland, and it is increasingly gaining acceptance among home buyers.

But what about the banks – would they be willing to provide mortgages to people wanting to buy them?

You bet they would.

We know that because they already are.

Individual banks may from time to time tighten their lending criteria for apartments, but provided they have a minimum floor area of 40 square metres and aren’t leaky, leasehold or being purchased as an investment, then in most cases standard mortgage lending conditions will apply.

If 3000 units are built and the average amount buyers need to borrow to purchase one is $450,000, that’s potentially $1.35 billion in new mortgage lending for the banks from this one project.

If 4000 units are built that would grow to $1.8 billion.

The banks will be falling over themselves to shovel it out.

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141 Comments

People with vested interest who want prices to stay high will discredit the governments efforts to bring affordable homes to the market

If anyone discredits the govt's plans for this site, it will make no difference whatsoever because the govt is going ahead with it no matter what anyone says. The reason to state opposition to this project is to point out that there are likely to be certain adverse outcomes or that the money could have been spent in better ways. That's all.

Well the banks always do well, no matter what is happening.

In what other industry can you create an asset out of thin air and charge interest on it? It's quite literally a license to print money.

Campaign group Positive Money commissioned polling company Dods to give a cross-section of MPs four statements about Britain’s money and banking system, and to ask whether they’re true or false. Just 15 percent were aware that new money is created when banks make loans, and existing money is destroyed when members of the public repay loans. Some 62 percent thought this was false, while 23 percent responded ‘don’t know.’ The Tories seemed to have a slightly better idea, with 19 percent answering correctly, compared to just 5 percent of Labour MPs..

https://www.rt.com/uk/407973-money-mps-poll-bank/

Unlikely to be much different in NZ. As for the general population, the vast majority probably think that there is a 1:1 relationship (or near-about) between deposits and loans.

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Thanks for this good, balanced article Greg. So much crap is being written.
Thank God for interest.co.nz and Simon Wilson, that's all I can say

interest.co.nz trumps much of the NZ economics media content

LOL ... and you said enough - thanks God !!

What about congestion.
Property in my area in Hamilton had 1 house and 2 cars.
Now replaced by 4 town houses and 8/9 cars.

Taxis and walking.

An catch a ride on the flying pig.

Anything you build in Auckland is going to create congestion. That’s not an excuse to not build anything. I imagine most people that live here will work in city and either bus or train (or light rail when it’s built)

Taxinda and Cullen will probably offer tax rebates to cyclists paid for by another increase in Excise duty which will not be deemed to be a new tax.

A fine idea, and a potentially revenue neutral way to reduce congestion overnight. Beats building more roads.

I find it bizarre in NZ that you can claim mileage in a car as a business expense, but not if you do the same business trip on a bicycle.

So is KB prefab housing, or is it 5 level apartment blocks?

Are they mutually exclusive? Presumably inner city developments like this will be fairly dense blocks, developments in the suburbs could be prefab houses. You can even build apartment blocks using prefab tech:

https://www.stuff.co.nz/life-style/home-property/76833041/modular-apartm...

What makes sense is a mix. Different people want and need different things, so if the objective is accommodation rather than speculative profits, then we need some family-sized houses, some compact ground-level places for the retirees, apartments for the young working couples, a few bigger places for the larger than average families. What's crazy is the people getting hysterical because they imagine that it's all high-rise or all standalones that won't fit.

It's not possible to build this in "couple of days". Gives buyers a completely unrealistic perception. Looking at the artist impression they must have got the wrong image

Houseworks, are you commenting in the right forum? It appears you've become lost - again. Anyhow, for a change, refrain from the doom and gloom and try to remain positive. This Government is the one that will deliver on affordable housing. If you'd care to look, their track record on delivering actual substance from other election promises is there in plain sight!

Keep trying loser your trolling does not work. Go play with your grandkids toys for some light entertainment.

Nothing says "classy" more than personal attacks.

It doesn't say everything was done in a couple of days, the apartments were just stacked in a couple of days. Obviously there's work beforehand building planning, constructing units offsite, building foundations etc, and afterwards connecting the units to services and adding the cladding and balconies you can see in the artist's impression. If you got an unrealistic impression perhaps the problem is yours.

"finishing touches are still under way and expected to be completed by April. This includes the installation of the cladding and services."

"Ian Duperouzel of Stackit says the system shaves 50 per cent off a build time"

Twyford said there would be 3000 to 4000 units built on the 29 hectares.
30 to 40% would be Kiwibuild.
There would be some standalone units plus units for the open market as well.
This is not damn possible to do this!!!!!!!!
Greg, you say the garaging is in the basement?
So they are going to dig out or just make them 4 levels high?
These ghetto like units will not appeal to families and who in their right mind will buy into them?
I will guarantee there will not be 4000 built unless they go higher and they backtrack hugely on what Twatford has said will be built!!!!!
If this is what the future of Auckland housing for the non home owners is for 600k, then god I wouldn’t be staying!
All it will do is to force the price of decent housing in Auckland up!

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Calm down. Read the article and most of your objections are addressed.

Being affordable is one thing, but these units are tiny and more akin to accommodation in a major Asian metropolis rather than little old New Zealand. Auckland *is* a fantastic city and I miss the place, but I would not trade my life here in Napier for living in a shoebox. Had enough of that when I lived and worked in Asia.

I guess they aren’t building them for you then. At the end of the day I’m sure someone will want to live in them, I doubt they will be empty. People who don’t have kids, don’t want a yard, want to be close to city with good public transport. Young professionals, oldies, etc.

My last two homes were at least four bedroom. However, seeing the state of the housing market here, I chose to downsize to a two bedroom house. I felt wasting so much space with so many others forced to rent or were even homeless was unethical. Surely there is a market for smaller properties.

Well we all end up in a box of one type or another. Until that happens, I'll put off political sainthood evidently gained by living in a bedsit and enjoy being able to share my 'spare' rooms with family and friends who visit on a regular basis.

250sqm homes are destroying kiwi culture. Most home these days resemble some mansion from America.

We need to return to 100sqm homes like were the norm 40 years ago.

Asia is apparently more like new zealand than auckland these days.

I don't believe there will be homes whether apartments or townhouses for an average 450k in my albert/pt chev. The give-a-mint will be in the "red" when all costs included. And we just heard that the nearby better schools such as Gladstone have changed their enrolment zone to exclude kids from this development and send then to Avondale instead which effectively reduces desirability.
House Works

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Better to be in the red for building housing and somewhat alleviating the housing shortage than continually being in the red by pumping taxpayer money into accomodation supplements.

I say go for it. Would be good to make it high tech - gigabit fibre to all units. A subway station would be great as well.

Personally, I'd question the utility of a subway station in the absence of a subway. I suppose it could work as a newspaper kiosk.

Could be interesting when the subway tunnel intersects the central interceptor from western springs.

Or housing for the homeless and an air raid shelter however there's a railway line only a kilometre or so away from the build site. I guess Uber will have to do then. Just wanted to make it like a little city within a city.

If the railway's that close, then putting in a new station could make sense.

Existing station is probably fine, could contract a van/bus to do shuttle runs morning and evening, getting residents out to the train station and unitec students into unitec in the mornings and vice versa, or they could just walk the kilometre

By the time these houses are built, interest rates will be 2% higher at a minimum and there’ll be 200m2+ houses with sections going for the same money, so good luck with the sales at $450k there. However, this will add more stock to the growing pile and make houses truly affordable after 2020. Downside will be a lot of lost shirts on the way. Govt will be ok of course because they’ll keep taxing the working class into permanent serfdom..

. Downside will be a lot of lost shirts on the way.

Only among those who think houses can earn more income than and appreciate more than value than the income growth potential of the general population. In the case of Australia, Morgan Stanley doesn't think so. The may be right; the may be wrong.

http://www.afr.com/real-estate/property-outlook-the-worst-in-30-years-mo...

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I cannot believe how negative some of the commentators are on this site. We have been told for sometime that more houses need to be built in Auckland. Now that Labour says it will build some they get knocked. What did National do to help alleviate the shortage up there. Absolutely nothing. You only need to look to Christchurch to see what happens when more houses are built. Prices come down along with rents and everyone is better off.

Gordon. It is of course so easy to pick which comments come from the darklords. Not that I bother to read those from the most obvious propagandists. However, because they are such entrenched National supporters it has changed me from being ambivalent to being a National party hater. It is truly a shame that too few of the NZ masses follow this site. If they did National would be doomed forever.

I have to agree Gordon. All Nats did was open the door wide for tax paying kiwis to get disinfranchise from their own housing market (overseas speculation) and boost capital gain and profits for mainly boomer speculators (core nat voting block) and the banks (record profits). Tax paying kiwis voted to stop this and thats why the Nats are in opposition.

We have to try something else than debt stacking property speculation as an economic model. Its byproduct is financial enslavement of our youth with stupid levels of rent, and low business profits because they have massive wage inflation to service mortgage and rent of their workers. No wonder 500k kiwis under the age of 45 (peak tax paying years) now live in Queensland, what a fantastic ROI on 13 years of tax funded youth education and medical that is. Most i have met cited housing as their main reason for leaving. And then there is the tax recycling into rents and mortgages disguised as working for familys. No wonder banks and speculators are laughing.

Well landscape is changing. I like most kiwis voted to try something else. Thank god for democracy.

We have to try something else than debt stacking property speculation as an economic model. Its byproduct is financial enslavement of our youth with stupid levels of rent, and low business profits because they have massive wage inflation to service mortgage and rent of their workers.

We have to try something else than debt stacking property speculation as an economic model. Its byproduct is financial enslavement of our youth with stupid levels of rent, and low business profits because they have massive wage inflation to service mortgage and rent of their workers.

I think it's important to understand why govts like bubble economics. (stock markets or houses as the vehicle). The relationship with consumer spending is impossible to ignore, even though it's barely talked about by the politicians (little more than a "nice problem to have", which the sheeple will interpret how they please), but quite often alluded to by central bankers (who the sheeple don't really listen to anyway).

There most certainly is NOT 500K Kiwis under the age of 45 living in Queensland. There probably wouldn't even be half that number of Kiwis living in Queensland in total, let alone aged under 45.

indeed there are 650K kiwis in Oz total.

House prices and rents are stable from what I can see.
Some of our rents have dropped a wee bit but most are paying the same as 2 years ago.
Most investors are far better off than they were as their interest rates are now 20% lower than they were 2years ago!
This company,ex will,not be built with 4000 units as it is impossible from what Teyford has stated.
There are sewage and stormwater issues.
There will be a desireablity issue as well.
Everyone who buys one will lose money as there will be so many resale’s on the market all the time which will only put huge pressure on prices.
They will be like the ghetto housing estates in England that has only got problems.

The biggest issue is that there is no way that the streets around there could accommodate at least 4000 cars every morning and night getting out between 7 and 9 in the morning and then coming home again!!!!
The supporters of this complex are dreaming if you think this is a goer for the betterment of Auckland!!!!
.The Man” has spoken!

Excellent article. The way Labour seem to be going about their work is falling into place. Conceptually it all fits together nicely. Big and bold. And Plenty of big stakeholders all getting a cut. Nice.
.

LOL

What damn concept???
Just hot air and no plan whatsoever!
Twyford stated there would be standalone properties and property for the general market!!!
So he was clearly telling lies!!!!!

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If you really want to convince people of your point of view, might I suggest rolling on the floor screaming and threatening to hold your breath until you turn blue? It's the obvious next stage in this hilarious man-tantrum.

If he can hold his breath until he turned blue.,he would be doing all of us a favor

PT will keep floundering and flip flopping all through this term ... that is what incapable and incompetent people do to get away ( albeit for a while) from being put on the spot and have them exposed !!

Sorry to see that Greg is trying to soften the blow by placing this and other articles on housing with misleading titles to suit the agenda ...

CoL hijacked Unitech project to make it look like they are doing kiwibuild and they are going to make a dogs breakfast out of it .... all the cheerleaders will look stupid and get eggs on their face later.

Why are you so angry and negative? Are things even worse in Christchurch than the data is telling us? I told you to diversify. I thought bricks and mortar was bullet proof. Do you ever think of anyone other than yourself? If Labour help one family into their own home they have done more than National did in nine years.

Not negative at all Gordon!
Just get tired of all the BS that this coalition keep spitting out without thinking about what they are saying!
You just have to shake your head as it is very hard to fathom how so many people actually think that the COL are actually doing great things, when they haven’t done a single thing that will be of benefit to NZ
They now want to spend more money on BIKE LANES when very few people will actually get on their bikes.
Shane Jones wants to blow 400k to explore how beneficial state highway 43 is to Taranaki????
400k to who and for what damn purpose.
Pike River entrance, where is that at?
All these trees being planted, where is that at?
Reduce child poverty, where is this at? no money now for that!
Reduced immigration, no that isn’t happening
Kiwibuild? Nothing yet except for a fictitious 4000 units on a site not capable of taking that and won’t get off the ground at all with the figures Twyford states.

The problem is that no one in The Coalition has got enough experience or business experience to run a country.

Do,you honestly believe the crap that constantly comes out of their mouths is going to come to fruition?

I want a better country and so would like them to do a great job, but the reality,is that they are out of their depth totally!

You can support them as much as you like but you will eventually come around to it that yes the people on here that are against the coalition of losers, were right in what they have been saying.

Generally what they are looking to do doesn’t affect us financially, it is for the general well-being for the country that I am very concerned for!!!

Echo Bird, you're gripping with both hands on what is just an opinion piece in the Herald. Thank goodness Labour canned Nationals proposed and no doubt unaffordable tax cuts. Note how they also resumed contributions to the Superannuation fund in an effort to secure future funding future aging population. Yet another fiscally responsible promise kept - tick!

Haha, Don't shoot the messenger expired poppy ! .... its not the opinion that matters , it's the numbers my boy, but a blind cheerleader cannot see the wood from the trees, could you RP?

as I told YOU many times before RP ... " Simple things please simple minds "

- tick!

Echo Bird, all of a sudden you (conveniently) appear to have much higher concern for the country's finances than your own. To further confirm your self inflicted condition of Political Amnesia, heres the fiscal hole National left Labour to sort in 1984; http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1070... Now, if at the time your Mother was still retrieving the dummy you repeatedly spat, no excuses, there is always Google.

Sure, be concerned when credit rating agencies downgrade us and interest rates on New Zealand' Government debt stage a dramatic rise. We are not heading there anytime soon so your scaremongering is just another time wasting exercise.

One thing's for certain, if God forbid, hardship should strike our great country, angrily pushing to the front of the que will be you. With little regard for others predicaments, you'll be demanding a handout from what is hopefully a Government with its finances in check.

Whos idea was Kiwisaver? Sir Michael Cullen during the fifth Labour Government in NZ. I'll bet you belong to it too.

Echo Bird, I suggest you spend your thoughts supporting a Government who gives consideration for the country's future, what has to be paid for tomorrow and not a party that lives for the day because tomorrow may never come. Kiwibuild is addressing today's housing affordability issues so that tomorrow, more families will be owner occupiers then renters.

On a closing note, I leave you with sobering article about how stopped super contributions have cost billions!; https://www.stuff.co.nz/business/industries/72105340/Stopped-contributio...

RP, .... you bleat : "I suggest you spend your thoughts supporting a Government who gives consideration for the country's future, what has to be paid for tomorrow and not a party that lives for the day because tomorrow may never come. " ... and more of the same nonsense moans.

Well i suggest you enjoy that yourself until you witness the failure of this CoL ...God has given us some grey matter to use, it is your right and choice not to use it and remain idle.

Your patriotic cryss and emotional blackmail does not even wash with semi-intelligent people, obviously you are towing the party line well, just like comrade PT ...

I was born over a decade before you were ExPoppy, so don't give me lessons in history - use them for your own convictions to enjoy life in the SIMPLE cuckooland.

Oh, you might like to see an Optometrist to help you with your "Vision" too before you go completely blind..

Ha-ha-ha-ha-ha :) Well, as you are a founding member of the "COW" you're excused for crowing loudest to the country about how popular Coalition policies have rendered you vulnerable.

"http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1070"...

"I think one should always be pretty sceptical about any politician who comes along and says, 'Look, with taxpayers' money we're going to do this and this and this' ..." Bassett says. 

This statement from Dr Bassett certainly applies now

I would be very wary of a politician that does not say what they are going to do with tax payers money. It's one of the main things the government does.

So did you actually read the article or just the quote?

It's about the type of grandstanding maniac politicians in the 70s in nz and who had been put to bed until last year. Until last year there was a lot of financial discipline and responsibility in government but that has now drastically changed

That link does not show an article but rather an ad for a Porsche "Porsche reveals powered-up Cayenne"

In the shadow of Think Big - NZ Herald
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1070...

Apology dtc

Yes, even Matthew Hooton is prepared to admit that the National government under-spent us in to one hell of a mess. I agree with him that when Labour campaigned on the debt reduction target it had no idea just how bad the (literal) rot was that had set in with respect to the health system. National were very effective at silencing those in the know - all a part of their bullying/dirty politics playbook. They really were a disaster and thank goodness their tight four (Key, English, Joyce, Coleman) are gone from the scene now.

Heads should be rolling on Middlemore. Covering up the rot, sewage and mold problems in the building and just neglecting it whilst it it got worse, more expensive, more dangerous and possibly beyond repair is absolutely inexcusable. If Coleman hadn't bailed and run away, no doubt he'd be intoning that it's the fault of the patients for drying laundry indoors and not opening a window.

Another one set to bail;

https://www.stuff.co.nz/national/politics/102910419/finlayson-gone-lohen...

Can only be good for them.

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If you are really concerned for the general well being of the country you will give Labour a chance to help those born in the generations after us. National certainly only looked after its voters.

"Do,you honestly believe the crap that constantly comes out of their mouths is going to come to fruition?"..

Do you honestly believe we have to listen to your crap?

I have no problem with the type of housing on the site and, while dense, is what we need in Auckland. My issue is who is actually going to do the building? I suspect this is crowding out the private sector which is what Mr. Twyford stated was his intentions as the "market has failed". Of course there is no free market in housing - the rules and regulation require the type of housing we have now (mostly sprawl).

Well, one possibility is the construction capacity currently in Australia. Plenty of reports that the last lot of off-the-plans apartments aren't selling, construction boom is hitting the skids, so those crews may well be looking for work elsewhere. Plenty of Kiwis over there too, who wouldn't need visas to come back.

Neither would the ozzies, only the foreign imports, which from what i saw in my last trip into sydney cbd was a large portion of the construction workforce.

I see the upside in that this could free up some construction capacity. However what would the head offices of the big four banks say about loaning on further off-the-plans apartments in that situation?

Yeah, sorry to write this knowingly it will piss many here off ...but i feel that a counter opinion is in order.

A very disappointing piece to say the least Greg, simplistic and lacks any substance, needless to go into any details as the whole suggestion is just not worth the time.

So why would a seasoned reporter try to massage numbers and assume banking intentions at a time when the pressure is mounting on this incompetent minister who is showing us that he is only good at Cursing National and raising taxes ??

Not sure why it comes across as an attempt to find excuses to this hijacked project and to soften the blow made by all realistic and practical discussions and views against such a waste of public money ( in the way proposed) and lack of vision.

What 3000 -4000 units?? we all know there will hardly be 320 kiwibuilt units by 2020 ...unless PT flip flops again till then ...do you know something we don't?

I thought that I will find some breaking news when I read your misleading title ( as usual) but it seems that you are now unofficially becoming the spinner for anything PT faces or anything that could support bringing house prices down - your job will not be very easy in the coming days and weeks because of PT's own incompetence ....

There was no news in your article, there were only ill conceived conclusions where You thought that Banks will support such a project - So it should have been posted under the Opinion section, then no one would blame you ! - these trumpet blowing articles have long lost effect since the 70s - in fact , it insults most people intelligence.

I am so disappointed in your biased simplistic way of calculating such a huge project as if done on the back of an envelope ... especially done by someone who follows the housing market so closely and should know better.

In the midst of all the shallow calculations, you forgot what PT said about 30-40% only ( Hopefully) being Kiwibuilt ... so you got carried away counting your chooks assuming all will be kiwibuilt and all will be 50m2 - 100m2 .... so quite naive and unrealistic Calc.

Why do you think that Banks would fall over for lending that amount of money on a highly risky project ? ..Do you think that they are starving?
You have not provided any proof of such and intention ...!!

The average $450K mortgage is for people who earn over 100K a year and have about 100K deposit ..... Assuming that such people will agree to live in that slump and get through the ballet which PT said will set up ....

All in all,,, This article just sounds like the sort of music desperate and illiterate people would like to hear and it is nothing but a white wash of this CoL's stuff ups and useless wet dreams ... it just proves again that there is hardly any substance to this CoL in solving this issue.

I have saved this piece for future debate - So disappointing indeed.

Echo Bird; Take advice from your prized mentor Bennett, just "zip it tweety" and leave commenting to the open minded. “One’s opinion should only be as strong as one’s knowledge on the matter.” ― Eric Hirzel

Touched a dead nerve, have I ? ... sorry but if you cannot take the heat then leave the kitchen Expired Poppy !

But You are correct , I should leave commenting to knowledgeable people like yourself who can only resolve / understand this sort of rubbish and stay drugged by BS coming at them from all credible or otherwise sources.

Enjoy..

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Waves of regret that I started reading yet another of Eco Birds tedious ramblings – oh dear, such mindless drivel, but then remembered he’s just messing with you and having fun.

Take his blather seriously at your peril.

I don't read Eco's stuff, kudos to you, and to RP, I find it hard work. TM2 I find quite tough as well so I miss his. A few others I gloss over to as they seem to be on copy and paste.

I have no axe to grind for property investment, as I think people are entitled to invest how they seem fit. Good on them for doing well, but the back patting is very unkiwi so I find it a little weird and creepy. But I do want house prices to be in line with income and DTI ratios closer to 3 instead of 9. I want homes to be affordable for everyone and for future generations. People can make money with these types of scenarios, and have done in the past, so not sure why the huge push for obscene unaffordable prices, which is rather tiresome.

Eco Bird, you are wasting your time trying to talk sense to many on this site.
Anyone who knows what they are talking about will know that the figures being quoted are BS and yes I,totally agree that this is a very amateurish illinformed writing from Greg, and he should know a lot better!
Yes you are entitled to write what you like Greg, as you are a journalist, however you are so far off the mark it is not funny!
You will be left with egg on your face over this article Greg, without doubt!
I agree that Banks will not be keen to lend on crap box’s in a ghetto complex as they will be a very time co summing exercise having to have mortgagee sales.
Yes only my opinion but comes from someone who knows what he is talking about, unlike Mr Twyford!
This COL is totally out of their depth for competence, without doubt!

So you have undertaken large multi dwelling developments before, is that what you are saying ?

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I think "The Man" and Eco Turd should get a room and shriek doom and gloom at each other.

Then perhaps the rational and objective people can have a civilized discussion.

Agree. I now just scroll on past. The both post tripe.

Brock, sorry but you are far from a rational person if you believe the BS!

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I don't, so it's pointless peddling it at us.

"Banks will be falling over themselves to lend on Kiwibuild".

Which banks? Perhaps Northern Rock, Lehman Brothers or Bear Stearns? If I ran a bank I'd be actively protecting my loan book from Kiwibuild. Banks will be falling over themselves after lending on Kiwibuild. Unless they demand 30-40% deposits.

Vivid, you are totally correct!
The only way would be if the government guaranteed the loans and they won’t be doing this, as the type of people who,would be buying the ghetto box’s will be people who rely on 2 incomes to be able to pay the mortgage, so no children, and far to small for children.
There are going to be so many on the market all the time as the buyers want out of the ghetto, hence prices will only drop!

I thought maybe this article is a preparation of floating a change of plan to build 4000 units to accommodate all people needing a home on the HNZ list,

That will solve Auckland's homelessness and child poverty issues ... etc - Great, So be it , Do it ( if you can afford it)....and let's move away from his daily moaning rouine...

However,
- That will also make the Gov the biggest Landlord in the southern hemisphere in 5 years, and
- Will piss off all the Maori and Islanders who demanded 3,4, & 5 bedroom houses for their whanau ( as Mihingarangi Forbes asked them to consider on the Q&A program ).

If this is what might possibly be cooked behind closed doors, then Expect PT to flip over again and cave in to demands and get a knighthood for it... he might still try to claim it as kiwibuilt though !!

Otherwise, there is Zero chance in Hell that anyone would buy in a project like this, no matter how naive, careless or ill informed they are !

PT can think of somewhere else to start his Kiwibuild program - if there is any money left in the till !!

Where's all the propbulls and spruikers gone...? Gotta love the narrative shift... hehe. Watch out the shirts, boys.

We are busy buying and getting top deals on quality properties Tim. And there is still competition among other buyers out there who are also making buying decisions. In a few years those who didn't take action and buy a home will be repeating the same old mantra that the market doesn't work, overpriced, unfair, unaffordable etc instead of securing a property now during a buyer's market and getting themselves into a stronger position.
House Works

Tim, their biggest threat - Kiwibuild. They collectively huddle together under the "COW" as they stand to be the biggest losers.

How dare those FHBs get a leg up. That's not fair!

Time will tell and then people like unpragmatic Pragmatist and yourself may be left wondering what could have been. There's more to it than saving or earning a little bit of interest

Bwahahaha :)

Yet another who can't save to save themselves......

Yet another racked by fear and sitting on the sideline bellowing instructions at those on the field

Houseworks, Its spelt wracked not racked :) Although, dont you think "traumatized" reads better?

Merriam-webster has this to say
"wrack has so often been used as a variant spelling of rack, especially when used in the phrases “(w)rack one’s brain” and “(w)racked with pain,” that many dictionaries now list it as a variant.

I racked my brain and summoned up all the faces that I could remember, but nowhere could I locate this man with the red hat. 
—L. Black & R. Lynd, Horlick’s Magazine, 1904"

You are (w)rong again! Anyway I can't be bothered with this, I will leave you to have the last word.

Based on the unitary plan offset and outlook requirements (assuming 6.25 m frontage x 8 m depth ) won’t each site require (5m x6.25 in front ) + ( 3m x 6.25 rear) = 50 m2 of yard space?

With a dwelling above another there will presumably need to be a water impervious walkway leading to it which might mean maximum impervious area rules might be breached.

Digging to make basement car parks sounds horrendously expensive. Based on the above and 30% road coverage in the development it sounds like if you can stack the units 2 high on a 50m2 footprint it would fit, just barely. Kiwis tend to like green spaces though

What about the standalone units and other housing for the private sector, plus schools and shops that Twyford and Ardern have stated will happen on 29 hectares?
Or, were they just not knowing what they were saying?

A challenge. Come up with one thing that will work on this Kiwibuild site. Your view from the get go has the land as solid rock, earth moving equipment utterly useless and whole site eventually surrendered to the weeds!

Quit the fluffing. Admit openly you don't want Kiwibuild to work because it threatens your unbanked equity.

Earthworks are possible but very expensive in NZ. Why do you think most kiwi houses do not have basements?

In Auckland at least its expensive because you don't have to go very deep before you hit volcanic rock. And therefore its cheaper to build above ground, where you also avoid issues with moisture from being underground, have access to natural light and ventilation, and we don't live in tornado alley so there really isn't a good reason to go underground.

And for most of us, no pressing need to store large amounts of root vegetables.

He has become very angry and negative since the change of government. Am I surprised? No! He has a poor performing portfolio in an unfortunate town and with the measures Labour will bring in over time it can only get worse for him. He was warned but he knows better.

Ffs Gordon.
We are financially extremely well off by way of income and assets.
We are in the top 1% of wealth in the country .
Yes of course I am negative to this Govt. As it should not have got in and is going to great harm to NZ.
They are totally out of their depth

If you are so well off why are you so pissed off with them. If they help one family who missed out on the lucky years they are doing great things.

Like you say Gordon, those that are loudest in opposition to Coalition policies are admitting they stand to be the biggest losers. (Debt junkies have the most to hide)

Because they are damned incompetent and you surely can see that by their continued crap,they spurt out?
What have they actually done that has actually benefitted NZ so far????

Probably for the same reasons much of America's and Britain's well-to-do voted Trump and Brexit respectively. They want to preserve their "divine birthright" at any cost, even when society collapses around them, knowing they're safe in their gated communities.

It got into power as it is smarter than National and it had a better leader. Get used to them as they will do at least 6 years. National has no friends and in 2020 will still be without one. As Labour makes New Zealand a more level playing field it will gain more momentum. Why do you think the rats are deserting National. They see no chance of regaining treasurey in 2020 .

For ONCE in you lifetime RP .. use what is left of your brains to think before you Assume what others think or want .. before you throw away accusations and loads of rubbish.

NO ONE here is against building more houses to meet current and future needs ..social or otherwise!

You are nuts if you believe that home owners or landlords would care much if property prices fell 5, or even 10% over time because of KiwiBuild ( other than the value of your own Shack) - almost all had a rises of 60-70% lately so it won't bother them as much as you think to get up in arms about new projects.

For those half-brained emotional bleaters here, this is not about protectionism ... landlords and most homeowners WILL actually stand to benefit more if all this Kind of mess goes through as announced so far -- Unintended consequences could be harmful and create a bigger mess - and that is what some wiser people here are alerting to and cautioning from because they DO see the wood for the trees.

However, everyone here agrees on few things they want to see ...
- A viable practical and executable plan to solve this Growing issue of housing.
- A cautious and wise usage of all resources.
- and, A vision for the future - without this stupid 1970 political rhetoric and Social dictatorship ...

Free markets do backfire bigtime when when messed up with by stupid illcalculated and biased regulations. This is the Nature of Capitalism - reactions are inevitable, and clever inclusive management tends to minimize the damage !

Yes, On the surface, there will be few beneficiaries from these new law amendments and building ideas in the short term .... but No ONE has actually gave a thought of how the consequences would workout.

The Hijack of the Unitech Project is a blunt example - If that plan was to go ahead as planned years ago or with few amendments , then surely developers will build a competitive project to suit the current market and it would well bring prices down in that project - they can even put 10000 units in that area if they were allowed to go higher ( like all civilized countries) and they might even produce $450K or cheaper units for FHBs !! .... But then again Labour will lose face and votes after they put their finger in the pie and feel small and short as they followed something National started -- Absolute Childish LOT.

So again , wake up RP and look beyond your limited horizon for a minute without your sick conspiracy theories.

Yup :-) Echo Bird, you stand to lose a lot under this Government. Que one whole hour of sad piano music; https://www.youtube.com/watch?v=aWIE0PX1uXk

RP can you please tell me how and why Eco Bird stands to lose a lot under this government?

Sorry, your question is directed to the wrong contributor.

Eco Bird, for DGZs gratification, explain why you are so upset and detail what you personally stand to lose under this Coalitions widely popular policies.

HAHAHAHA ... RP has gone funny Gents, his rotten head ate the rest of his brains out - and lost his sense of direction lol - poor thing !!

RP, don't despair mate, we were only joking --- Take a deep breathe and make an appointment with your GP - your situation is getting out of control.

RP! What on earth would make you say such a stupid thing?
How on earth does building box’s in a ghetto in Auckland affect our property portfolio in a Chch?

TM2, now that's a stupid question! Why do the Coalitions policies impinge your alleged Christchurch based utopia? Being the loudest, closest runner up critic behind Echo Bird, something must have crawled inside both your heads and died.

Just spit it out. Being you have no regard for anyone but yourself, a Coalition policy or three must have affected you personally. A rude awakening one could say.

Que the illogical comment in reply - now.......

RP! You did not answer my question!!
Has absolutely nothing to do with my financial position whatsoever!
The reality is that the COL shouldn’t be in power and since they have been in power they have done nothing to benefit the average Kiwi!
Many times I have said and they are showing that they are out of their depth

Your head is in The sand if you think that they are going to be good for you unless you are an unemployed person, as that who they seem to want to help!

TM2, this is a crock of BS. You've been disadvantaged but too proud to own up to everyone here! You're not coated in teflon like you repeatedly claim to be. Its telling in your comments.

RP! you obviously know all about our business, so please tell me how we are going to be disadvantaged???
I await your reply with great interest!

Haha, he won't reply -- RP has gone mad !! lol

I noticed that he and few other noobs have only one tune to play - no logic and no experience , just trolls and drumming out what they even do not comprehend ....funny they don't mind if they present themselves as complete idiots ...!

It seems that he is beneficiary of some sort protecting his patch and the shack he owns

He and others think they will be immune of tax increases as a result of this mess. They just cannot see beyond their own nose.

Echo Bird, TM2. what kind of Government proposes tax cuts in year nine of nine total years of underfunding infrastructure? One glaring example, look at Middlemore Hospital. Its like a lot of Christchurch homes, it just looks like a building on the outside! I suppose you'll argue next the Hospital only went rotten in the last six months. Anyway, where is Coleman now?

Right now, instead of being the loudest whinger, a smart speculator/Landlord would focus all energy on protecting their weakening financial interests. Its those who boast loudest of their unbanked capital gains are usually the ones who have already spent it. Repeatedly begging for a Government that will keep your ponzi going is just plain desperate and is telling in your comments. Don't blame the Coalition. If your mortgages are 200% bigger than at drawdown and you have nowhere to turn, that's your fault!

Remember, when you diss a saver (i.e. Term Deposits) you foolishly out yourselves as having zero discipline to save a dime to save yourselves.

And a "coalition of losers" is infinitely better than the Kiwi equivalent of the Brexitrumpocalypse any day.

LOL, the narrative is becoming more like "Give Labour a chance" ... as if someone is stopping their unrealistic plans. They have the power to make a mess so no one can stop them until 2020.

This is like sending a school drop out to uni to give him a chance of higher education ! - and you say, well he can hardly put 2 and 2 together - --- No, comes the answer, he will do better with time, he deserves the chance of doing something which is better than doing nothing !!

doing something which is better than doing nothing

That all depends on what your objective is. Surely building more housing and more infrastructure is better than doing "nothing". Where "doing nothing" is better is when you know that the future outcomes carry more risk than reward.

Furthermore, if this were the National govt, I'm sure that the underlying philosophy of "doing nothing" would be something akin to "let the market sort it out." However, the biggest issue there is that there is no indication that the market can "sort it out." S'pore and Japan are two good examples where "doing something has been better than doing nothing," particularly as it relates to housing and infrastructure.

Finally, the idea of "unrealistic plans" is just troll bait. Back-of-the-envelopes are what they are. Directional but essentially meaningless when soaked in one's own narrative.

Let's do what Japan and S'pore did - I am ALL for That.
Bring in the chinese and Japanese to do it and get rid of the rotten Councils and Stupid bureaucrats and tree huggers . We will ALL BE HAPPY in just 3 years.

You want proof that a mess is imminent? - Sorry can't give you that today.... all you need is to wait and see it for yourself.... but a whole pile of trees is called a wood

"unrealistic plans" is NOT just troll bait ... it is something that some wise, professional, articulate people in the relevant industries agree on and it is showing in submissions , blogs and opinion pieces (only of what is uncovered of these plans so far ) -

This CoL is acting like a stubborn spoiled child who is insisting on carrying on what they want ( and think it is the right thing to do against all advice ) - no one will stop them to mess up and you and I will be asked to CLEAN that mess later through taxes and lost opportunities. Some of us can get these expenses back but most folks who won't be able to do that are the same working class people who the CoL claim to be helping!

Who could believe or hold Teflon Phil to commit to anything as his story changes every week and details are scarce to prevent scandalous exposure .? or just make sense of what he is saying ?

But you believe what you like and what you can or cannot resolve...

Suffice to see politicians claiming stuff started by others ( while mocking them) as their own achievement to know that they stand to be deceivers and losers. and suffice to see article like this to know how many people would blindly follow this train wreck to a crash.

Time will tell, mean while playing with words will not help the narrative either, I am sure you already knew that !

Oh, no one really can say with a straight face that National did nothing - that stupid propaganda can only be dished out by shameless polys - the records are there , but talk is cheap and disgusting at times.

"unrealistic plans" is NOT just troll bait

Yes it is....if you don't know the outcomes and cannot map the future scenarios. It's pure troll poo.

That is exactly what noobs like you think ( looking for guaranteed answers in life before the word Go and cannot predict what can or not possibly happen unless they look it up on Google first ) ... that is because of the extent of your knowledge, experience. and understanding of things or the lack of the above.

Open your mind mechanical J.C. ... you might learn something before late or you could become a complete fool in your society !!

enough said !

So, was just reading this, which goes into the banks' reluctance to lend on off-site construction.

https://www.stuff.co.nz/business/property/102840259/prefab-industry-seek...

Could somebody enlighten me as to their reasoning in this? Why would they see an incomplete pile of house parts sitting in a field for months as less risky than a pile of disassembled house parts in a factory scheduled to be put together in a much shorter time? Would they be happier about lending on modular if the factory delivered the parts to site so they can sit in the rain for a few months, exposed to weather, vermin, squatters, thieves and vandals as with traditional construction methods? Why on earth would components made in controlled factory conditions and fitted together into a functional dwelling in a much shorter time, and with much less room for Mr Cock-up to have his way, be seen as riskier than a set of components left out in the rain for months while a succession of subbies and labourers feck about with it?

The answer is possibly quite simple. The banks are fully invested in the housing bubble. That's where they generate 70% of their income. What is being proposed here is a wholesale change to the status quo that the bubble is built on. Despite that the banks say about "disruption", that is the last thing they truly represent.

I believe it has to do with legal issues. Whilst your house is being built at someone's yard, it is not your property (it belongs to the person doing the building) and as such can not be sold by the bank to recover their money. The liquidators of your pre-fab builder of choice will sell "your" under construction house to someone else and pay the builder's secured creditors first.

For industrial machinery we are building for customers the lawyers seem to be fine with us slapping a "property of J B Smith Ltd" sticker on each module as we build it. Dont see why house parts should be any different.

It's hardly insurmountable.

Very simple. It’s to do with transfer of ownership. And possession. Unlike a vehicle that has a unique identifier - VIN. A house siting off-site and under consrtiction could belong to anyone. This poses enormous risk to the financial institution. When does title actually pass? Lots of legal ramifications to overcome.

A car financier does not finance a car during manufacture so why is it assumed that a bank should fund a prefab during construction? It’s unrealistic to expect s builder to find a custom build over 12 months on a customers piece of land but a quick build prefab on the builders land is a different situation. The Bank can lend against completion.

Of course, a car financier is a retail business. There would be a trade financier funding the dealer, and a massive bank providing funding to the vehicle manufacturer. Look at all the new apartments that have been built in Auckland over the last few years. Probably 90% or more bought with mortgages. And the developer would also have had development funding. Prefab constructioin is no different, the bank provides the mortgage to the buyer when the title isissued. The main difference is that the time frame between when the customer pays the deposit for the apartment and when it is completed is shorter for prefab construction. It doens't affect the funding mechanism.

I see they are really getting serious, intending to build Really High Buildings that are, er, 4 storeys high. Surely a Very Important Place like Auckland could be a bit more ambitious, like 20 storeys.

Any mention of relaxing density rules is guaranteed to turn the staunchest Epsom anti-RMA free-marketeer into a raging NIMBY statist. You know, the kind of people who insist Auckland is denser than NYC or Hong Kong as an argument against it. Who can forget the moment during last year's leaders debate when James Shaw called out David Seymour on exactly this, and Seymour didn't respond?

https://www.tvnz.co.nz/one-news/new-zealand/1-news-multi-party-leaders-d...

As it is a NZ Government initiative I hope they make it compulsory to use an NZ bank!!!