KiwiBuild adds 25 apartments from private developer to its total

Thursday, 13 September 2018

A ballot to buy 25 apartments in Onehunga will open next week as the Government uses private developers' plans to bolster its KiwiBuild total.

The @340 Onehunga properties available to eligible KiwiBuild buyers are six studio apartments priced from $380,000, 12 one-bedroom apartments priced from $490,000, and seven two-bedroom apartments priced at $600,000.

Construction on these homes started on Thursday. They are due for completion by August 2019.

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Phil Twyford said the architecturally designed apartments would be built to high specifications to minimise ongoing maintenance costs and maximise living space.

'They will also have high-quality fittings included in the price such as blinds, washer/dryers and dishwashers, which are often hidden costs for first-home buyers.'

The apartments are in a desirable central location, which is well-serviced by public transport, he said.

'The @340 Onehunga development is a six-minute walk from Onehunga train station and on a main bus route with connections to the CBD and Auckland Airport. It will also have light rail. There is a range of amenities nearby, including Cornwall Park and the proposed new foreshore at Onehunga Bay. Onehunga is also one of 10 suburbs across the city identified as a priority for Auckland Council investment in streetscapes, landscapes and cycleways. 

'This is a unique opportunity for those who have been locked out of the property market to buy a modern, new home in an increasingly popular area that might otherwise have been out of reach for first home buyers,' Phil Twyford said.

Only eligible, pre-qualified buyers can enter the ballots. Successful buyers will need to pay a 10 per cent deposit, and the rest when the apartment are finished.

The government says its off-the-plans initiative incentivised property developers to build more quality, affordable homes faster, by reducing their risk in a number of ways, including underwriting homes in new developments.

Twyford said partnering with developers to provide off-the-plan homes gave them more certainty and sped up the building process. It also made it easier for developers to receive bank finance. 

But he said there was no 'special guarantee' by the Government for homes bought under the KiwiBuild initiative. 

'This is a commercial relationship between a home buyer and the developer, just as it would be in any other setting. That's why people need to think seriously about home ownership,' Twyford said. 

'The role of government through KiwiBuild is to partner with developers to stimulate the building of affordable homes that the market has failed to deliver.'

There had been 97 proposals received from developers. Of those, 48 were rejected because the developer did not have a track record.

The developer of the @340 Onehunga housing block, NZ Living's director Shane Brealy, said while margins would be slightly less for developers, the difference between the open market and KiwiBuild market was only varied by 10 per cent to 15 per cent. 

'It's no different to a traditional development, rather than you can start faster and get underway with reduced costs,' Brealy said. 

'We only owned this land two months ago and as of today construction is under way. Now, if it was a non-Kiwibuild it would have taken 12 months by the time we had enough finance to start construction.

'The base model of development is you have to get at least 60 per cent of presales and have the buyers have confidence you're actually going to start rather than sit on their deposit for a long time before you start construction. Whereas over here, you just get going.  It just makes sense.'

KiwiBuild is on track to deliver 1000 KiwiBuild homes by mid-2019, then a further 5000 homes by June 2020 and another 10,000 homes by June 2021.

Twyford said the government had been clear that the houses built in Auckland would be medium-density.

'They will be flats, apartments and standalone houses. There will be a mix, but people's attitudes have really changed in the past few years. Auckland is a modern international city and a lot of people don't want to spend their weekends mowing the lawns. They'd love to be able to live in an urban neighbourhood and in an apartment you can lock and leave and go away for the weekend, access like great rail. That's the kind of contemporary lifestyle young people particularly want.'

He said smaller sections and smaller homes were more affordable.

ARE YOU ELIGIBLE?

KiwiBuild home owners must:

• Be a first-home buyer or in a similar financial position as a first-home buyer ('second chancers' must no longer own a home and must meet the asset test that applies to the KiwiSaver HomeStart grant)

• Be a New Zealand citizen or a permanent resident, or a resident visa-holder who is ordinarily resident in New Zealand

• Have income of no more than $120,000 for a single purchaser, or no more than $180,000 for more than one purchaser

• Intend to own the home for at least three years

• Intend to live in the home as their main place of residence for at least three years.