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.