Kiwibuild ‘crowding out’ developers: Orr
particularly in the near term,’’ the Reserve Bank said.
‘‘The bank has assumed that half to three-quarters of what Kiwibuild contributes to residential investment will be offset by crowding out of other private investment over the forecast horizon.’’
The central bank warned that because of the time it takes to get going, the short-term addition to the housing market would be virtually nothing.
‘‘In the 2019 fiscal year, the bank assumes that the net contribution of Kiwibuild to residential investment is almost zero, as the Kiwibuild programme is in its infancy and the construction sector is capacity constrained.’’
In a statement, Housing and Urban Development Minister Phil Twyford said the Government was ‘‘working with builders and developers’’ to increase the capacity of the sector, as well as considering proposals to speed up consenting and simplify the building code.
‘‘We are freeing up land and reforming the planning rules to allow our cities to make room for growth,’’ Twyford said.
‘‘A lack of infrastructure financing is a massive constraint on freeing up more land for housing, so this year we will introduce legislation to reform infrastructure funding and financing.’’
In May last year, Twyford slammed an assessment by the Treasury that played down the impact Kiwibuild would have in adding to residential investment.
The National Party’s housing spokeswoman, Judith Collins, said the Reserve Bank analysis was logical based on the nature of Kiwibuild.
‘‘While there is no increase in capacity . . . all that’s going to happen is the cost of housing for people who are building a house themselves is going to go up,’’ Collins said.
‘‘When the [Kiwibuild] policy was put in place – and they had it for six years before coming into government, they didn’t really work out what was holding back more houses being built.’’
ACT leader David Seymour said he was not surprised by the lack of impact of Kiwibuild.
‘‘The Government is just buying existing homes, putting a Kiwibuild logo on them, and adding a set of rules around who can buy them. Kiwibuild is a distraction from the real problem of high land prices which could be alleviated by cutting planning red tape,’’ the MP for Epsom said.