How KiwiBuild works
The availability of affordable, quality homes in New Zealand has fallen in recent times. Over the last decade, many people who would have been able to buy their first home no longer can.
KiwiBuild is giving those New Zealanders an opportunity to buy their own home.
We do this in a number of ways:
- by purchasing land for Government-led developments
- we integrate affordable housing into major urban development or regeneration projects
- we purchase or underwrite homes and
- we support developers and connect them with eligible KiwiBuild buyers.
KiwiBuild creates a clear pathway to home ownership for eligible first home buyers and means they don’t have to compete with established homeowners and property investors.
How KiwiBuild homes are priced
KiwiBuild homes are not subsidised. They are sold at market prices.
In Auckland and Queenstown-Lakes, a KiwiBuild home cannot exceed $650,000.
In all other regions, the maximum price for a KiwiBuild home is $500,000.
It is important to note that these are price caps. In many cases, homes are likely to be sold for under the price cap.
KiwiBuild helps developers achieve a more affordable price-point by underwriting a portion of a development and encouraging them to use land efficiently. This reduces a developer’s holding costs and allows them to build faster and more efficiently.
KiwiBuild homes are expected to appreciate in value at the same rate as a market home. Research carried out by HLC, the Government’s developer, revealed that homes sold at a fixed price using a ballot mechanism (like KiwiBuild) had the same percentage increase as market homes in the same development.
How KiwiBuild acquires land for housing
The Land for Housing programme is one of the mechanisms KiwiBuild uses to acquire land. The KiwiBuild Unit identifies and acquires suitable Crown or private land, and then on-sells it to developers or iwi with a requirement to build a percentage of quality, affordable new homes.
Housing New Zealand, HLC and other government agencies that are involved in building houses are working with KiwiBuild to include KiwiBuild homes in their developments.
Buying off the plans
The Buying off the Plans initiative involves the Government underwriting or purchasing new homes off the plans to lessen the risk to suitable developments, led by the private sector or others, in exchange for accelerating a greater number of affordable, KiwiBuild dwellings.
Underwriting KiwiBuild compliant developments, by either guaranteeing a minimum price or direct purchase of completed dwellings to be resold as KiwiBuild homes, gives banks and other financers reassurance to lend money to developers. This means construction gets underway faster, in turn bringing homes to market sooner.
This initiative enables developments that otherwise would not have been undertaken to be completed, speeds up developments and ensures the construction of affordable homes.
Large scale projects
The Large Scale Projects initiative uses existing Crown land and purchases additional land from the private market to allow for major urban regeneration projects. The developments will include KiwiBuild, public and open-market housing.
Offsite manufacturing is the planning, design, fabrication and assembly of homes at a location other than the final site for the home. These homes are sometimes referred to as modular or pre-fabricated homes.
Pre-fab manufacturing can reduce the cost of construction but its greatest benefit is the speed at which the homes can be built.
An Invitation To Participate (ITP) was issued to offsite manufacturers in the final quarter of 2018. KiwiBuild will work with successful respondents on the terms of engagement, and will take into account the scale and complexity of each proposal.
November 30, 2018