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Price of one-bedroom KiwiBuild home rises $50,000 in 3 days

Newshub logoNewshub 10/05/2018 Dan Satherley

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The Government has bumped up the price of an entry-level Auckland or Queenstown KiwiBuild home by $50,000.

The hike for a one-bedroom property comes only three days after the Ministry for Business, Innovation and Employment sent a document to developers, KiwiBuild: 'Buying off the Plans',  promising they would cost $500,000.

Housing Minister Phil Twyford told The AM Show on Friday they would now be $550,000.

"It's gone up slightly. We did the original modelling for those price points two years ago, and under Judith's [Collins, National housing spokeswoman] Government's policies, build costs are rampant."

Those rising costs haven't affected the costs of two- and three-bedroom KiwiBuild homes in Auckland and Queenstown, which remain $600,000 and $650,000 respectively. KiwiBuild dwellings outside of Auckland and Queenstown will be priced at (or below) $500,000, according to the document.

The Government has also been under fire from the Opposition over its plans to buy homes currently under development in order to reach its ambitious KiwiBuild targets. Documentation on the scheme now says it "aims to facilitate the delivery of 100,000 affordable dwellings", rather than just build.

Mr Twyford promised the $2 billion earmarked for KiwiBuild would be spent many times over, on Friday saying it would be around 20 times, as it recouped costs from buyers. Homes will be sold for exactly what the Government paid for them, with no margin.

Mr Twyford says there's a lack of affordable homes being built at present.

"Less than 5 percent of new builds in the market are in the lower quartile, are affordable," he told The AM Show, hoping the Government's new plans to purchase homes off the planswill spur development at the lower end of the market.

"By underwriting or buying affordable KiwiBuild homes off the plan, what we do is we de-risk and speed up developments that otherwise might not take place at all."

a person in a suit and tie © Provided by MediaWorks NZ Limited Ms Collins said the real reason that affordable housing isn't being built is because of the Government's overseas buyer ban.

"They can't get their presales because one of your policies, which is stopping anyone from overseas buying anything. All the developers have got the message."

Mr Twyford said that policy was yet to be implemented.

"The National Party have got so many excuses about why we shouldn't build affordable housing - apparently it's 'KiwiBuy', apparently we can't make new developments because we have to build infrastructure or the density's too high. This is the reason we have a housing crisis."

Ms Collins said the combined effect of the new 'KiwiSubsidise' scheme and the foreign buyer ban would be a "cluster", and defended her own party's record on housing as "fantastic".

The Overseas Investment Amendment Bill, which would tighten restrictions on foreign property ownership, is currently at the select committee stage. Submissions on it closed in April.

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