KiwiBuild underwrites could cost $1.8 billion
Judith Collins - Housing and Urban Development
27 November 2018
The KiwiBuild programme could end up costing the taxpayer $1.8 billion after only seven houses in the Wanaka Northlake development have been sold, National’s Housing spokesperson Judith Collins says.
“The likelihood of Housing Minister Phil Twyford’s pet housing scheme KiwiBuild building reaching its target of 10,000 homes a year by the end of the Government’s first term in office is looking dire.
“Mr Twyford has argued that buying off the plans doesn’t require the Government to spend a dollar.
“But the Minister has also confirmed if those houses that have been bought off the plans don’t sell, the Government will be forced to buy them. The Ministry of Business, Innovation and Employment have estimated that this could cost $20,000 to $50,000 per house.
“If up to 35 per cent of houses are delivered through the buying off the plans initiative, the Government could face a cost of up to $1.8 billion, out of KiwiBuild’s budget of $2 billion.
“Mr Twyford is going to struggle to deliver on his promise if he continues to announce houses bought off the plans in areas where there isn’t enough demand. There are 211 KiwiBuild houses in Wanaka that have been underwritten, but the ballot for the first 10 has not only been extended, but at the end it also had three unsold houses.
“The entire KiwiBuild programme is at risk.
“If KiwiBuild’s fund is spent covering houses that aren’t sold, there will be no money left to deliver the large-scale developments, such as the one announced in Porirua recently.
“KiwiBuild is balancing on a knife-edge. Mr Twyford cannot build the 10,000 homes a year he wants to without buying off the plans, but the more he uses this initiative, the more he risks burning through the money he has.”