KiwiBuild not for low-income families, says housing minister

Monday, 29 October 2018

Why are Kiwi houses so pricey?

KiwiBuild isn't intended to help low-income families, Housing and Urban Development Minister Phil Twyford says, in the face of criticism about some of the scheme's first buyers.

New owners of the first completed KiwiBuild homes, at McLennan, Papakura, were welcomed to their properties with a street party at the weekend.

Derryn Manga and Fletcher Ross, buyers of one of the 18 new homes, said they had given up on buying their own home before KiwiBuild arrived.

But there has been criticism of the couple's suitability for the scheme - Manga is a graduate doctor and Ross a marketer.

**READ MORE:

Derryn Manga and Fletcher Ross are ready to move into their home.

* First KiwiBuild families welcomed to their new homes by prime minister**

*** Auckland's first KiwiBuild homes completed, ready for families

* KiwiBuild ballot officially opens for first 18 homes in South Auckland**

'A marketing manager and a newly minted doctor with no kids get a 4brm house? That KiwiBuild thing is really working for less well-off Kiwis with families,' posted one Twitter user.

Of course I have, but what about all the homeless or overcrowded families we used to hear about. Have they all been housed now? Surely the intention of Kiwibuild is to help low income Kiwis into housing, not doctors and marketing managers. Very poor choice of poster children.

— Tony Stuart (@TonyStuart55) October 28, 2018

'In six months' time they won't be under that $180,000 cap. This wasn't who I thought KiwiBuild was going to be for,' posted another.

So hold on, the first Kiwibuild owners are a soon-to-graduate doctor and a Marketing Manager? In 6 months time they won’t be under that $180k cap. This wasn’t who I thought Kiwibuild was going to be for. #nzpol

KiwiBuild homes are aimed at families who once would have expected to own their own home, but have been locked out of the market, said Housing Minister Phil Twyford.

— Fancy Macaroni Cheese (@rpcnz) October 27, 2018

To qualify for a KiwiBuild house, buyers must have joint income up to $180,000 as a couple, or $120,000 as a single person. Buyers must be first-time purchasers or in the same financial situation as first-home buyers.

KiwiBuild houses sell for up to $650,000, for the largest homes in Auckland.

Jacinda Ardern in Manga and Ross's new kitchen.

Initial KiwiBuild properties are being sold via a ballot scheme. There have been concerns that the successful few who buy will end up better off, buying properties at less than market value, but those who miss out will not be helped.

Twyford said KiwiBuild was aimed at building affordable houses because market failure has led to only 5 per cent of houses being built in this price range in recent years.

'KiwiBuild is aimed at those families who years ago would have expected to own their own home but have been locked out of the market because of the national housing crisis,' he said.

'It is not a programme aimed at low-income families because they may not be able to service a KiwiBuild mortgage.'

He said the Government was working on a shared-equity scheme that would help people on lower incomes.

'And why we're building 6400 more state houses over the next four years and have already grown the number of emergency housing places to 2500.

'The families at McLennan represent many areas of the workforce including nurses, warehouse workers, concrete workers, administration workers, engineers, designers, students and stay-at-home mums.'

University of Auckland Business School economist Ryan Greenaway-McGrevy said it should not be a surprise that a new doctor could qualify.

'Perhaps [it] speaks to how unaffordable housing has become. The effects of KiwiBuild will spillover into the broader housing market - it is not just about who gets the KiwiBuild homes. The increased supply of housing under KiwiBuild puts downward pressure on house prices across the board,' he said.

Commentator Shamubeel Eaqub, co-author of the Housing Stocktake, said the eligibility criteria for the scheme were broad.

'People also may not know how challenging it is to be a doctor without private practice and large debts. I have heard stories of young doctors leaving places like Queenstown because couldn't see way of ever owning a home there.'

Broker Glen McLeod said 'even doctors have to start somewhere'. 'It's not so much about the profession, it's about the income at the time of application.'

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