Housing Minister Phil Twyford says 'affordable' KiwiBuild home prices less likely to be affected by fluctuating market than higher valued homes

Housing Minister Phil Twyford says 'affordable' KiwiBuild home prices less likely to be affected by fluctuating market than higher valued homes

Housing and Urban Development Minister Phil Twyford says KiwiBuild homes would be the least affected by any movements in the housing market.

He was responding on Wednesday to questions in Parliament from National’s Housing Spokeswoman Judith Collins.

“I do not expect the value of KiwiBuild homes will be significantly affected by even the kinds of market fluctuations that commentators are currently talking about at the high or lower end options," Twyford said.

Reserve Bank Governor Adrian Orr told TVNZ's Q&A programme on Sunday that house prices “could fall” as asset prices return to a steady state.

Twyford said because KiwiBuild homes are affordable, they are likely to be the “least affected by any potential movement in the market.”

In the past, Twyford has highlighted that KiwiBuild homes will be “affordable” – with the max cap at $650,000 in Auckland and $600,000 everywhere else.

“KiwiBuild is focusing on parts of the market where there is a chronic shortage of housing and a high demand from first home buyers.”

Meanwhile, Twyford welcomed Kiwibank’s move to pre-approve mortgages for up to 90% of the price of KiwiBuild homes, saying it showed the bank’s “willingness to get behind” the KiwiBuild project.

Collins expressed concern that banks, by requiring a deposit of only 10% for KiwiBuild houses, were leaving borrowers exposed to interest rate rises, and “possible falls in property values.”

Twyford responded with: “KiwiBuild buyers, like all home buyers, weigh up the risks as anyone does when they buy a home or take on a mortgage.”

He also noted that banks are exercising their due diligence for mortgage applications with “increased rigour” lately.

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OK, so these kiwibuild houses will be at the lower end of the market. The part that was pretty much the sole preserve of investors up until recently. If the mortgage rates go up significantly, these lower priced investor properties will flood the market. Values will go down.

Yes indeed. You know something really bad is coming in the near future when ministers and bankers are making baseless claims to reinstate public confidence in the housing market.
This is no different from when Grant Robertson and the PM appear on numerous public platforms to declare that "NZ is open for businesses" while every sector in the economy feels otherwise.

This sums it up nicely.

“KiwiBuild is focusing on parts of the market where there is a chronic shortage of housing and a high demand from first home buyers.”

In other words,

'as long as we continue to create a chronic shortage and are the only hope for people who will never be able to buy a house any other way, then we can keep the prices at their presently artificially high price.'

Don't understand what his saying but don't understand the national clowns either. Why would anyone buy these when prices are supposedly coming down. Will be interesting to see how banks view these properties are they have fish hooks on when you can sell etc. Hopefully foreign buyer ban comes in this week.

That is a point. If interest rates skyrocket, these kiwibuild homeowner could become seriously under water by the time they can legally sell the property.

Because a low maintanence new build is a far better house than an uninsulated 1970s shitbox that some specuvestor is trying to unload, all else being equal.

What Kiwibuild houses?

Perhaps when they eventually actually build any this might be a problem. But until then let's not worry about it.