Focus on first-home buyers
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.
‘‘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.
‘‘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.
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.
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 had 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 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.’’
Auckland University 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 spill over 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 a private practice and with large debts. I have heard stories of young doctors leaving places like Queenstown because they 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.’’