Prime Minister Jacinda Ardern's Government is now a year old. We've sold the first KiwiBuild homes, and many more are on the way.
There's huge interest in KiwiBuild. People have a lot of questions and there's also a few misconceptions out there. So, I'd like to lay out the thinking behind KiwiBuild: why we're building starter homes and selling them, at a fixed price without a subsidy, to first-home buyers.
The national housing shortage is massive. When our Government came to office last year it was estimated New Zealand was 71,000 houses short, and that shortage was growing by 14,000 a year. At the same time, just 5% of new builds were in the affordable price bracket, making it really hard for people to move from being renters to homeowners. This led to surging house prices, skyrocketing rents and plummeting homeownership - a recipe for a crisis.
That's where KiwiBuild comes in. We're using the scale and buying power of Government to do what the market hasn't, and in doing so we are using a reusable fund of $2billion to build new homes. These new houses are sold at cost, for a fixed price. There is no subsidy.
By selling new KiwiBuild homes to first-home buyers we will reduce the housing shortage without putting additional costs back on the taxpayer, and increase the number of families who own their own home.
The positive effects of homeownership are well documented - healthier families, better educated children and more intergenerational wealth. By moving more people into homeownership, we will also reduce pressure in the rental market, and help stabilise house prices and rents by easing the housing shortage.
Few people realise that, unlike buying existing houses, first-home buyers buying a newly built home may only need a 5% or 10% deposit. This means a $35,000 deposit can buy a KiwiBuild home in the top price bracket - and that can include a KiwiSaver HomeStart Grant of up to $20,000. Some banks have also come to the party with special KiwiBuild mortgages only requiring a 5% deposit. And the mortgage on a brand new three-bedroom KiwiBuild home at McLennan can be only about $100 a week more than the average rent for a similar house in Papakura.
National opposes KiwiBuild and, sadly, chose to personally attack a medical student and her partner who works in online marketing because they were one of the first KiwiBuild families.
But the truth is, a generation of young Kiwis - with good jobs - have been priced out of home ownership. Over the last decade, families with incomes between $80,000 and $180,000 had the greatest fall in homeownership. Half of all families in this income bracket have children. The first KiwiBuild families are a slice of middle New Zealand, including nurses, warehouse workers, concrete workers, a medical student, administration workers, engineers, designers and stay-at-home mums.
There are families who can't afford the mortgage on a KiwiBuild home. We have inherited a broken housing market where even a modest starter house costs a lot to build. That's why we're working on a shared equity scheme to help those on lower incomes buy their own homes.
The biggest misconception about KiwiBuild is that it alone is going to solve the housing crisis. It is not. That's why KiwiBuild isn't our only housing policy. We've also banned overseas speculators and we're fixing the loopholes speculators use to dodge tax. We're making life better for renters and requiring all rental homes to be warm, dry and healthy to live in. And we've banned letting fees.
We're also helping those most in need. There are 1300 more families in public housing and we're building 6400 more state and community homes throughout the country over the next four years. We've also spent more than $100million housing the homeless this winter.
We're looking at every aspect of the housing supply chain to lower costs, including off-site manufacturing. We're opening up more government land for housing and reforming our planning system to reduce urban land prices.
KiwiBuild is the centrepiece of a much bigger plan - a plan that will help all New Zealanders have a warm, dry and affordable home, whether they own it, rent it or are provided it by the government.
