Stephen Tindall: KiwiBuild could do for NZ house buyers what The Warehouse did for shoppers

Tuesday, 27 November 2018

The Warehouse founder Sir Stephen Tindall sees KiwiBuild as a 'mechanism for innovation' that could smash the price of home-building in New Zealand.

Tindall is championing the new Financing the Future report on how to best develop an 'impact investing' eco-system in which private money and innovation is brought into play to make headway on social and environmental challenges facing the county.

His Tindall Foundation, set up following the sale of The Warehouse in 1994, was a pioneer of impact investing.

But Tindall says the Government's KiwiBuild could, in time, do for house-building costs what The Warehouse did for the price of consumer goods.

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'We are paying nearly double for building in New Zealand than what we should,' Tindall said.

'We have been able, through a lot of research, to prove we could get the price down by 42 per cent, if the supply chain changes.'

​KiwiBuild could provide the scale needed to attract big money into taking the research and making it an affordable reality.

'Even for a traditional home, if you build it in a particular way … you will be able to build a traditional home for 42 per cent less, through using factory mechanisms for panelisation, getting building materials that don't have double margins on them, etcetera.'

The Tindall Foundation became involved in affordable homes around 20 years ago, when it helped fund the Housing Foundation charity, which, by the end of the year, will have built more than a 1000 homes, which lower-income families buy on a joint equity, or rent-to-own basis.

'We're looking at another big project around KiwiBuild, which in my opinion, and the reason I have got involved is it's an impact investment,' Tindall said.

'The fact is that if KiwiBuild gave a contract to a big enough operator for, say, 5000 houses, they could invest the capital required to bring those prices to fruition.'

Large, international businesses had responded to the KiwiBuild 'request for proposal', he said.

Previous governments built a lot of homes, helping turn New Zealand into a broad-based home-owning democracy.

Tindall expected KiwiBuild to use some of the tricks of the past, including standardisation of building.

'Standardising homes, but having a range of maybe five different ones, so it doesn't look like everything's the same,' he said.

'You go back to the 1950s, building state houses. They all looked the same, but it served a fantastic purpose. Those houses are still good.

'When I was a kid I hated them, because there was almost a stigma to live in one of those, but not now. People buy them and love them.'

He was optimistic for KiwiBuild, despite much media criticism.

'I think its a mechanism for innovation, so yes I am,' he said.

Tindall laments the difficulty young Kiwis face in buying a home.

'In a lot of European countries and even in the UK, if you can get into a really good rental that's properly managed and you are not overpaying for it, and the people in the same place look after it as well, it's not the end of the world.

'The sad thing in New Zealand is while it's been incredibly aspirational all our lives, less and less Kiwis can buy their own homes compared with the past,' he said.

He recalled the comparative ease with which people in his generation bought homes.

'When I was a young married man we had a choice of a State Advances loan, or an ASB loan. I was lucky enough to get the ASB loan, but if I hadn't, I could have got a loan at 2 per cent or something from the State Advances. That's not there anymore.

'That was a social investment, that was. Look at how better off the country really was in those days,' Tindall said.

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