At least $800k for new houses

Most homes built under Auckland’s new Unitary Plan would be out of reach of many buyers, Auckland Council research suggests.

Only 15 per cent of new homes would be priced under $800,000, and fewer than 2 per cent would be under $600,000.

That means a chance for creating affordable housing for families had been lost, Labour says.

However, Housing Minister Nick Smith says few first home buyers would be purchasing the 247,000 homes the modelling showed would be needed over the next 24 years.

Labour leader Andrew Little says Government support for the plan’s housing provisions shows it is ‘‘more out of touch than anyone expected’’.

‘‘National just doesn’t get it. People need affordable homes to live in,’’ Little says.

Without a ‘‘credible plan of its own’’, Little says the Government is relying upon the Unitary Plan.

The Government has been ‘‘misguided’’ in urging the Independent Hearings Panel (IPH), which commissioned the modelling, to drop requirements that new developments of over 15 units included 10 per cent affordable houses, Little says.

Mortgages costing $600,000 swallowed-up nearly half of an Auckland median income, meaning just 2 per cent of these homes were affordable, he says.

‘‘Nick Smith has got the idea from an economics text book that if you just build loads of expensive homes then naturally the price of all homes will come down. He needs to come and live in the real world.’’

However, Smith told Radio New Zealand most of the first home buyers would not be looking to purchase the homes covered by the modelling.

Despite that fact, the number of new homes costing under $600,000, which make a quarter of all homes currently sold, was set to increase, Smith says.

‘‘The modelling from the IPH report shows that 6 per cent of homes are expected to be built in that range. That’s 20,000 homes. That’s actually more than what we are projecting to deliver through the HomeStart scheme.’’

Smith says he has also had ‘‘very positive’’ feedback from developers looking for investment to build houses within the $650,000 price bracket.