Kiwibuild likely to add only 9,000 homes over four years

Stuff reports:

The Government’s KiwiBuild programme could add as few as 9200 extra properties to New Zealand’s housing stock over the next four years, an economist says.

KiwiBuild has been touted by the government as a key part of the solution to the country’s housing woes. It aims to deliver 100,000 houses over 10 years, over and above what the market would have produced otherwise. Half will be in Auckland.

Remember all the ads, promising 100,000 new homes.

Data released by Treasury showed that, including the existing Crown building programme, 29,000 houses will be completed between now and 2022. The existing programme, including redeveloping and reconfiguring Housing New Zealand’s portfolio, will account for almost half of those homes.

Another 22 per cent of those homes will be off-the-plans purchases.

The Government has argued that these developments would not otherwise have obtained funding, so the houses can be counted in its “over and above” target.

“We accept that government backing for these projects will provide greater certainty and is likely to accelerate the development process,” Kiernan said.

“But the assumption that the projects would not have gone ahead at all, and that finance is the limiting factor on construction activity, is questionable given the strength of demand for housing and the labour capacity constraints currently being experienced.”

Without those two components, the net increase in construction was just over 9000 dwellings, he said.

Just another grossly inflated promise.

“And that figure makes no allowance for the crowding out of private sector work by the increase in central government activity – something that we see as being a substantial risk in the near term.”

So it may actually end up being even less.