Government to set up Real Estate Panel of agents to sell KiwiBuild homes

Property

Contracts to sell thousands of KiwiBuild homes could be available to real estate agents that participate in the Government's Real Estate Panel process

15th Feb 19, 9:30am by Greg Ninness

The Government's KiwiBuild unit is preparing to appoint real estate agents to undertake the sale of KiwiBuild homes as the scheme starts to ramp up.

The unit has issued a notice saying it intends to appoint a Real Estate Panel of agents to undertake the sale of KiwiBuild homes that are sold off the plans.

As its names suggests, the Buying Off The Plans Scheme involves selling homes to eligible KiwiBuild buyers before they are constructed.

These homes are usually part of larger projects undertaken by private developers.

The off-the-plans properties offered through KiwiBuild so far have mainly been relatively small projects, but with some major KiwiBuild developments in the pipeline, particularly in Auckland, thousands of off-the-plans properties could come up for sale over the next few years, potentially providing substantial contracts for the real estate industry.

The notice from the KiwiBuild unit says it will issue tender documents in early to mid-March seeking agents to form a Real Estate Panel, "to facilitate the sale and purchase of Crown-owned dwellings and/or properties that KiwiBuild needs to sell."

Individual contracts for specific projects would then be issued to agents selected from the panel.

It is seeking agents form throughout the country to participate in the panel process.

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49 Comments

by BuyLowSellHigh | 15th Feb 19, 10:03am 1550178188

"These homes are usually part of larger projects undertaken by private developers." I.e. homes that would've been built anyway. Poorly located kiwibuild homes off the plan will be a very hard sell to say the least. First home buyers are generally risk-averse, and buying without seeing the final product will be a deal-breaker for most.

Direct quote from Twyford - “We have had one or two teething issues. One of the issues has been that first home buyers don’t want to buy a house off the plan that’s not going to be built for the next 12 or 18 months.”

by Simon | 15th Feb 19, 11:07am 1550182042

They need to understand what's really behind the perceived 'housing crisis'.

Its human nature, fear and greed.

All the bleating (much of which we see in these comment sections) happens when prices are rising, peers buy a house and gain 100's of thou by doing nothing, and the nervous nellys who sit it out cry and cry that 'it's not fair!' Some can definitely buy somewhere, but they can't bring themselves to pay 100's of thous more than their neighbor Bob. They want too see prices crash to level the playing field!

Now in Auckland clearly prices are falling. Essentially this is all it takes to soothe the restless minds of the nervous bunch who missed the boat. Will they buy now with prices falling when they choose not to on the way up? No way.

The real crisis may exist in rents, but even then only the unemployed or hospo workers suffer here and for them moving further out, or even to cheaper towns will solve their issue. More state houses built is the obvious solution not building new houses for FHBs who think very much along the lines I've outlined above

by Yvil | 15th Feb 19, 11:10am 1550182240

Great assessment Simon!

by BuyLowSellHigh | 15th Feb 19, 11:38am 1550183886

Agree with most of what you've said. But I'm very much a libertarian when it comes to this. I think we would achieve the best outcome for everyone if government got out of the housing market entirely (with some exceptions, like administration of the Building Code and some aspects of the RMA).

by Yvil | 15th Feb 19, 12:35pm 1550187323

Hmmm, I just realised I'm a libertarian, thanks BLSH.

by unaha-closp | 15th Feb 19, 12:00pm 1550185224

It is human nature, fear and greed.

Auckland spent a decade building less houses per capita than anywhere. Auckland stopped building by jacking up the price of land so the comfortably smug land owners of Auckland made $100,000s by doing nothing, merely enforcing an effective restriction against new entrants. But then as the price of land got ridiculously high, people stopped buying so fast. And also Auckland opened up land supply in surrounding towns. Land prices have started to fall.

Therefore "obviously" a "solution" needs to be found - the comfortably smug demand it. Obviously the taxpayer needs to spend $billions and $billions of dollar on building state houses in Auckland, because no one else is investing nearly enough to keep land prices high. A taxpayer boon required to soothe restless minds.

by guwop | 15th Feb 19, 1:38pm 1550191083

I agree Simon. People who cannot afford the city should be supported in moving elsewhere to accomodation that better suits their needs. And by the way, rents are perfectly affordable for the working class (not students and not those on benefits) and will fall as more houses remain unsold.

by lalaland | 15th Feb 19, 2:50pm 1550195405

Well done. Couldn't agree more re:fhb

by Boatman | 15th Feb 19, 11:41am 1550184104

Just hold on .............Why on earth do they need agents ?

This is a lottery for goodness sake, and something like 40,000 people have "entered" the draw for the first 33 houses

Or is it something else ?

Like , maybe these Kiwbuild houses are overpriced little shoe-boxes, loaded with developers profit , and the public are not buying this crap

by DiDi | 16th Feb 19, 9:34am 1550262844

Ridiculous given how HNZ has been buying houses at hugely inflated prices. They had better have a very careful
criteria and oversight on what they are being told and charged.

by unaha-closp | 15th Feb 19, 9:55am 1550177740

Yay, we are subsidising real estate agents.

by Boatman | 15th Feb 19, 11:29am 1550183373

Yip .............. we are just about to add another 5% to the cost of that $650,000 shoebox that no one wants , PLUS of course there will be a $5,000 fee for "marketing " each unit .

This hapless bunch of fools are about to be taken for the roller-coaster ride of their lives by the RE industry .

And Kiwi taxpayers will end up footing the bill

by Pragmatist | 15th Feb 19, 2:10pm 1550193053

Well, the existing kiwibuilds are all being sold by realestate agents anyway (at least I don't imagine the RE agents that were showing people around the Papakura houses were working for free).. so no, its not getting more stupid.. it already hit peak stupid (in that respect) a while back.

by Pragmatist | 15th Feb 19, 9:57am 1550177834

Jesus, can they just kill this daft kiwibuild idea already.

by Ex Expat | 15th Feb 19, 10:19am 1550179186

The objective is fine, the strategy and execution are highly flawed (trying to be gracious). They should call timeout and revisit the strategy. One of the problems this government has is a lack of relationship with the people who know how the market works. No surprises there as they are contemptuous of Business in general.

by Yvil | 15th Feb 19, 11:12am 1550182322

Do you mean they should "re-calibrate" LOL

by richard1965 | 15th Feb 19, 10:00am 1550178038

Once agents are involved, to prove themselves will try to sell at higher prices. The basic purpose of Kiwibuild fails. unless the price is fixed by the government.

by RichMuhlach | 15th Feb 19, 10:13am 1550178804

I would assume that prices would remain fixed by the government (ie no house worth more than $650k).

Bringing in real estate agents would help with the selling process, and I'd imagine they'd get a commission for every sale. They can prove themselves by selling high volumes. Watch out for "free iPad" or "free kitchenware" or "we'll pay your moving costs" promos attached to KiwiBuild homes soon.

by Boatman | 15th Feb 19, 11:37am 1550183872

@Rich ............. why on earth should it even be necessary to "bribe " buyers with free i-pads to buy these houses ?

And who says agents could sell high volumes ?

Currently the sale process is a lottery FFS !................and 40,000 people entered the lottery , so why would they need agents

by RichMuhlach | 15th Feb 19, 11:45am 1550184306

"Developers are even offering up incentives for buyers now. Fifteen homes in Pukekohe are up for sale, and you can buy them without even going through a ballot process.

But wait, there's more: the first 10 buyers will get $5000 towards whiteware or furniture."

https://www.newshub.co.nz/home/politics/2019/02/revealed-no-one-entered…

by fmr ca | 15th Feb 19, 12:25pm 1550186751

No buyers in the Te Kauwhata ballot. Perhaps people don’t want to be stranded in an overpriced shoebox 40ks out of Hamilton? Wanaka also a hard sell. Is the taxpayer on the hook for the difference between the original prices and eventual selling price, if the developer has to heavily discount to sell?

by Pragmatist | 15th Feb 19, 5:52pm 1550206357

No.. the govt (ie. me and you by proxy) is on the hook for the whole damn lot if the developer can't find a buyer AFAIK.. Eventually they just demand payment from govt and sign the houses over and keep on with building the next 150odd that they have signed contracts for in the development.

by Nzdan | 15th Feb 19, 6:04pm 1550207094

$650k state houses for tenants who couldnt find themselves private rental accomodation due to coming up on a tribunal search for punching holes in walls and not paying the rent.

by Pragmatist | 15th Feb 19, 9:55pm 1550220912

So export all the a-holes to Te Kauwhata.. halfway between Hamilton and Auckland... hmmm, I can see some potential in this approach. A few walls, some gates... :)

Then we get left with the decent state housing tenants who can have the new ones being built in Auckland and other towns, and leave the private rentals to the free market to revalue downwards once the landlord subsidies are gone. win win.

by cmat | 15th Feb 19, 10:14am 1550178896

All aboard the gravy train.

by Boatman | 15th Feb 19, 11:44am 1550184277

@cmat ........... the Housing Minister is not telling us the truth

Treating the average New Zealander like mushrooms ....... kept in the dark and fed bullshit

by Yvil | 15th Feb 19, 10:39am 1550180359

Hmmm, who else could the government bribe for these pesky KiwiBuild houses that nobody wants to buy?
- they guaranteed the developers their profit,
- they exempted banks for applying LVR's to borrowers,
- they offered free furniture or white-ware to buyers,
- now they give incentives to the RE agents…

Who else can you and I, the working people who pay PAYE, give our money to, to save Twyford?

by Pragmatist | 15th Feb 19, 5:58pm 1550206715

"they exempted banks for applying LVR's to borrowers"

Bzzt, wrong, new builds were always outside the LVR restrictions, both for owner occupier and investors.

" they offered free furniture or white-ware to buyers,"

BZZZt: wrong, the developer is doing that, not the govt.

"now they give incentives to the RE agents…"

There are already RE agents involved in selling the KB houses.

0/3, You're doing worse than usual.

by Zachary Smith | 15th Feb 19, 10:37am 1550180276

I think Kiwi Build needs to provide an extra incentive. Something like guaranteed long term low interest rate or a guarantee that the Government will buy back the house for the price paid as long as it has been kept in good condition. This will provide a high level of financial security for the buyers.

Socialism, yes, but this should be government assisted housing.

by Yvil | 15th Feb 19, 11:06am 1550181981

Hahaha, exactly Zach and also, of course, free groceries for the full period the buyer lives in the house, like you say, it is government assisted housing.

by Yvil | 15th Feb 19, 11:19am 1550182764

Let's ignore who pays for the developers guarantee, the free furniture, the RE agents commissions, the lower interest rates you propose or the free groceries I propose

by Zachary Smith | 15th Feb 19, 11:21am 1550182915

Well long ago many young people got low interest rate mortgages from the government to buy their first homes if they qualified. They would get 3% rates while bank rates were much, much higher. It's ben done before successfully.
The low uptake is because it is just as risky to buy KiwiBuild as it is to buy normally. The risk of loss seems greater today. Let's give them a hand up! Otherwise what's the point of it all? How is it any different to buying normally currently?

by fmr ca | 15th Feb 19, 12:27pm 1550186839

The low uptake is because the houses are seriously overpriced in a declining market.

by DaveB1978 | 15th Feb 19, 1:47pm 1550191677

It is because the build cost is too expensive. They can't build them cheap enough to enable first home buyers to afford a new build. This is also why the private sector hasn't been pumping them out. Much easier to build 240 sqm houses and sell them for $1.2m

by Yvil | 15th Feb 19, 11:14am 1550182472

Question, who pays for the RE agents' commissions?

Answer……..

by Boatman | 15th Feb 19, 11:26am 1550183191

Kiwibuild has gone from being an election bribe based on wishful thinking to something that is now a scandal , as it bumbles or alternatively lurches from one outlandish self inflicted not-thought-through own goal to the next.

Now all that is left is for some sage advice for the Housing Minister .............. when you find yourself in a hole ........ stop digging .

by Pragmatist | 15th Feb 19, 6:01pm 1550206862

Dunno, the idea of Twyford in a hole and digging seems like a good one to me.. he'll do less damage there, and you never know your luck, he might manage to dig a deep hole and bury himself.

by Roger Witherspoon | 15th Feb 19, 11:58am 1550185121

The process rages on. Labour inflated house prices in the Clarke/Cullen years (just look at the housing debt to GDP ratio). National failed to reform anything significant. Labour inflate house prices.

The whole problem was created by government, with absurd regulations in housebuilding and by MMP, excessive immigration and political manipulation of interest rates. This creates greater dependency on government, the desired result of Modern Marxism.

When do the 20 and 30 year olds wake up and see that voting for the Tax More parties means they will personally pay more tax over their lifetime, as there is no one else to pay for government? That society will decline slowly at first and then rapidly as precious capital is wasted until there is none left.

by andreas_od | 15th Feb 19, 11:52am 1550184775

I am afraid to see one day the article titled "Government to set up Real Estate Panel of buyers to buy KiwiBuild homes"

by DaveB1978 | 15th Feb 19, 1:49pm 1550191780

KiwiBank + KiwiBuild + KiwiSell = ?

by Pragmatist | 15th Feb 19, 2:05pm 1550192711

KiwiBlunder.

by waymad | 15th Feb 19, 12:34pm 1550187249

Ray of sunshine though from the distant past:

'It's unwise to stop your opposition when they are in the middle of making a huge mistake'......

by kane02 | 15th Feb 19, 1:34pm 1550190853

Is this a joke?

by Badlad | 15th Feb 19, 5:29pm 1550204941

If you were contemplating buying a KB house off the plans, knowing that the market was weakening, economy slowing, potentially macroeconomic shocks on the horizon and a government whose capital relies more on intangibles than reality what would you do? You would wait patiently because let’s face it, whether by prevailing circumstances, bribery, welfare creep or sprinkles of Jacinda dust that KB home is going to be gift wrapped in lots of sparkly paper, ribbons and bows.

by gordon | 15th Feb 19, 6:18pm 1550207939

The Boy would be perfect for this job. He is an agent and he loves Kiwibuild. He will go on about not being an agent but once an agent always an agent. Divulging this is the worst mistake he has made on site. In saying that the comment about Jacinda not divulging her pregnancy pre election day was a cracker and then there is yesterdays announcement he was selling a house. He should have done that ages ago and diversified but no he knows better.

by THE MAN 2 | 15th Feb 19, 7:50pm 1550213411

Gordon, great to know you are still around!
No, would not even contemplate selling those crap boxes at any price, even if my license was still current!
Was held in high esteem by all my fellow agents and by people who used my professional services!
No need to comment about Jacinda, because everyone knows she is full of it!!!
Yes we have a rental just gone under offer, which we don’t normally do, however we purchased it well and have made a good profit but not our normal location so wife wanted to sell!
As you know Gordon I don’t like equities, however we do have a large portfolio being managed but not from our own investing!

by Wrong John | 15th Feb 19, 9:42pm 1550220141

I was going to have a(nother) crack at the government here, but you guys have done such a great job, I'll pass tonight. Have a cool weekend everyone.

by GV 27 | 16th Feb 19, 9:30am 1550262610

Labour taking a page out of the 1930s US multinational playbook by rewarding profiteers who contribute to a crisis with a seat at the table to make money off the supposed solution.

Mind-blowing stuff.

by Matt the Lad | 17th Feb 19, 2:33pm 1550367219

whats this all about ?
A panel required to sell a 100 houses ?