KiwiBuild development outselling the market

Monday, 23 September 2019

Housing Minister Megan Woods announces details of a reset to KiwiBuild. (Video first published in July 2020)

For Guido Turnock-Chambers buying a KiwiBuild apartment in Auckland was a bit like 'winning the lotto'.

The 27-year-old lending consultant won a ballot to be eligible for a three-bedroom apartment in the Northcote Fraser Ave development, and will pay $650,000.

'To be honest with you it was a bit like winning lotto. It was a great experience. I was very happy to be getting into my own home,' he said.

Guido Turnock-Chambers, 27, has bought his first home in Auckland's Fraser Avenue development.

Turnock-Chambers had been house hunting for several years, keen to stop losing money on rent, but was not able to find anything he could afford close enough to his job on the North Shore.

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It was much more convenient than other KiwiBuild projects in Pukekohe or Papakura, which he would not have considered, he said.

He said he would have paid at least $800,000 on the open market for something similar, although construction of his apartment would not be completed until late next year.

Turnock-Chambers said he used his KiwiSaver and a $10,000 homestart grant for the $137,000 deposit on the off-plan apartment.

'I'm supportive of KiwiBuild. It's been a great outcome for me and it's in the right direction for affordable homes.'

Colliers International director of residential projects Pete Evans said 50 apartments at the Fraser Ave development sold unconditionally in its first week on the market.

The Tuatahi housing development is being built on the corner of New North Rd and Soljak Place, Mt Albert.

More than two-thirds of the apartments had now been sold at a time of reduced sales activity in the city, Evans said.

KiwiSaver apartments in the Fraser Ave development range from $370,000 for a studio apartment to $650,000 for a three-bedroom apartment.

Evans said similar three-bedroom apartments on the open market would cost $850,000.

KiwiBuild critics should start to look at the benefits for desperate first home buyers, Evans said.

The Government announced a 'reset' to its flagship KiwiBuild policy in September.

Housing Minister Megan Woods' KiwiBuild reset has made it easier for first time home buyers, says Ockham Residential's Ben Preston.

Its ambitious target to build 100,000 was dropped, and it included a $400m progressive ownership scheme for up to 4000 families and wider support for first-home buyers, with buyers with as little as a five per cent deposit eligible for Government-backed loans and grants.

It also said it would sell 461 KiwiBuild homes in Wanaka, Canterbury, and Te Kauwhata (in northern Waikato) that were not selling on the open market.

'There's no doubt that supply has fallen far short of what was initially promised, which the Government acknowledged with its recent policy reset,' Evans said.

The KiwiBuild developer underwrite was achieving what it had set out to do, he said.

KiwiBuild had underwritten both NZ Living's 102-apartment Fraser Avenue development, 70 per cent of which were set aside for KiwiBuild customers, and 42 new apartments at Onehunga Mall.

Ockham Residential executive director Ben Preston said KiwiBuild had been good for first home buyers.

The company had sold 12 apartments at Hobsonville Point, Auckland through KiwiBuild and had about 15 apartments for sale at its Tuatahi development in Mt Albert, Auckland.

The reset had renewed interest in KiwiBuild developments, Preston said.

KiwiBuild was educating a new generation of buyers and helping people figure out if they could afford it.

Evans said there was a whole market of young people who lived in central Auckland and who get their friends to join up to developments like Fraser Avenue, which were not too far out from the city.