New Christchurch development offers 'affordable' homes at $550,000
Homes deemed "affordable" could cost up to $550,000 at a new Christchurch development.
Ngai Tahu's development company has agreed to build 180 affordable houses at its 600-home development on 40 hectares west of Riccarton Park Racecourse.
The definition of affordable is up to $550,000, which is the threshold to access the Government's KiwiSaver HomeStart grant in Christchurch.
However, the Christchurch City Council is concerned the new definition will exclude lower income buyers and has urged Ngai Tahu to ensure the homes are "genuinely affordable".
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The definition was set out in the newly established Riccarton Racecourse Development Enabling Act, which was passed by the Government to allow the development to go ahead.
A key element of the development has always been the promise it would include affordable homes. It was the major reason it received support from the Government and the city council.
The council wants Ngai Tahu to commit to providing a proportion of the affordable homes at and below $450,000, which was the HomeStart grant threshold for new properties before it was increased by the Government last year.
The median house price in Christchurch in February 2017 was $459,000.
As a requirement of the act, Ngai Tahu has produced a development scheme outlining its plans for the subdivision. It must then be approved by Building and Construction Minister Nick Smith, after consultation with the council.
In a letter to Smith, council chief executive Karleen Edwards said the affordable properties in the subdivision were intended to supply housing to people on lower incomes.
"The council is concerned that the 'affordable' housing products now offered exclude those on lower incomes for whom the project was an opportunity, as well as acting to stretch out the borrowing commitments of first-time buyers."
The development had originally intended to provide houses in the $300,000 range on a leasehold basis, but the leasehold model was discarded in 2014 and the HomeStart grant threshold was later adopted, which was $450,000 at the time.
The majority of the affordable homes would be built in "super blocks" and on sites smaller than 300 square metres.
Ngai Tahu Property development manager Dean Christie said the company was working closely with the building industry to identify options to help achieve a range of price points to meet the affordable market.
Cr Yani Johanson said at a council meeting last week he could not see the need for the development to occur because it was not going to provide affordable housing.
Cr Vicki Buck said she did not believe all the affordable housing would be at that $550,000 threshold.
"I disagree that it should be $550,000 in Christchurch, but that is what it is and I can't change that."
The land is owned by the Christchurch Racecourse Reserve Trustees but is surplus to their requirements and they plan to sell it to Ngai Tahu to develop.
WHAT THE PEOPLE THINK
Stuff hit the streets to ask the people of Christchurch what they thought about the Government classing $550,000 as an affordable new house.
Hadee Thompson-Morrison, 25, said she thought $550k was "quite high".
"I don't think I could afford that any time soon, I just don't earn enough."
Sixteen-year-old Abby Findlay said while she didn't know a lot about housing, "that sounds like a lot to me, although houses are quite expensive I think".
"My mum bought a house for about $300,000, and it needs a lot of work."
Grayson Hau-Northcroft, 27, said the Government's classification was "definitely not affordable".
"The Government gets a lot of things right, but when it comes to the property market, that's just not really affordable."
Brian Horo, 81, said "that's about what a house is worth".
"We come from New Plymouth and on average that's what houses are worth up there.
"For a decent quality home, that is what you would be expected to pay."
Kay Horo, 78, said she agreed with her husband.
"For people of our generation it may seem like a lot, but I agree with Brian, that's what a house is worth."
Megan Greenslade, 25 said $550,000 "sounds very high to me".
"On top of having to pay house insurance and contents insurance and rates, that is very high.
"For a couple, and I'm only 25, I've had a baby young, there is just no way that I could make ends meet and try and save to buy a house."
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