The announcement of the detail of the new governments Kiwibuild policy allows for a comparison of the differing approaches from National and Labour on New Zealand’s housing challenges.
There is no debate that New Zealand has an issue over housing affordability and homeownership rates. House prices grew 97% during the nine years of the Clark Labour government and another 60% during the nine years of the Key/English National government. Homeownership rates have declined from 75% to 65% over the past thirty years.
The primary answer is getting more houses built. National pulled every lever available to grow residential construction. We doubled the number of building apprenticeships, changed the planning rules for Councils, used surplus Government land, helped Councils fund infrastructure and introduced Special Housing Areas. This made possible new housing developments like Richmond West with 1,000 sections that is opening this week. These policies saw the number of new homes built each year grow by over 3,000 per year from 15,000 in 2013 to 31,000 a year in 2017.
I introduced National’s Homestart scheme in April 2015 that helps first home buyers with a grant of up to $20,000 for a deposit. You need to have contributed to Kiwisaver for three years and have a combined income of less than $120,000. In three years Homestart has helped 50,000 nationally buy their first home, including 1,200 in Nelson and Tasman. National’s policy was to double the Homestart grants last January but Labour cancelled these increases.
Labour’s original Kiwibuild promise was for the Government to build 10,000 homes a year, to sell to lower income earners at a price tag of $300,000. They are now proposing not to build them but just buy them from existing developers. The numbers have shrunk to just 1,000 by next July and 9,000 during this three year Parliamentary term. The price tag has soared to $500,000 in Nelson and $650,000 in Auckland. Those eligible can now earn up to $180,000. Eligibility will be by ballot and with 25,000 seeking a house in the first year and only 1,000 available, the chances are slim.
National’s Homestart is a better way of helping first homebuyers than Labour’s Kiwibuild for four reasons. Firstly, Homestart is helping many more families get their first home. Secondly it rewards families who save rather than those who get lucky in a ballot. Thirdly, it is focussed on families’ earnings less than $120,000 rather than $180,000. Fourthly, Homestart is a more realistic scheme in enabling government support for first home buyers to purchase a second hand house. For most generations, our first home has not been a new home.
The biggest problem with Kiwibuild is that it is not what Labour promised. It is no surprise it has been caned by commentators like Duncan Garner as a “Kiwihoax.”