First-home builders in line for rebate
A proposed $5000 rates remission for those building their first home in Wellington has received a mixed response from builders, who fear it will do little to boost the supply of new homes.
Wellington City Council wants to increase the stock of new housing, particularly apartments.
The rates remission initiative, which would have no impact on rates, is aimed at New Zealand citizens or residents planning a new build as their first home.
Mayor Justin Lester said the deal, expected to be formally adopted by the council at a meeting tomorrow, was a way to add an incentive to the construction of apartments.
‘‘We want to see more people able to afford to live in the central city.
‘‘We know Wellington needs to grow up, not just out.’’
The council has budgeted $200,000 for the rebate. It would not place more costs on ratepayers, he said.
The rate of new builds in Wellington is about 700 to 800 a year. The council expects 80 to 100 new builds would be eligible to claim the remission.
Lester said the $5000 off rates would make a ‘‘real difference’’ for first-home builders.
However, Scotty’s Construction owner Scott Feasey did not expect the rebate to make much difference, because most first-home buyers could not afford to build close to the central city.
First-home builders were looking at a minimum of $200,000 for land and $400,000 minimum for a build, he said. ‘‘So often, people buy the land, and we cost it for them, and it goes nowhere because it doesn’t fly, because they don’t have the capacity.
‘‘We get quite a few new inquiries, but we have to say we can’t build to the budget that they’re talking about.’’
Those who did pursue a first build had more money than the average, he said. ‘‘Their parents are usually partially funding it.’’
Jennian Homes’ Wellington managing director, Simon Barber, was supportive of the rates remission but he also doubted whether it would boost the stock of inner-city homes.
‘‘It certainly wouldn’t do any harm, would it? If council can get a rates rebate, that’s a message that the council is supporting firsthome builders.’’
He said first-home builders generally wanted to build close to the city, whereas Johnsonville, Tawa and the city’s fringe suburbs were more viable. Also, they typically wanted standalone houses, which would cost more.