Kiwibuild and the Crown Building Project - how will they affect you? video

Chris Skelton/FAIRFAX NZ

Government announces next steps in social housing plan

ANALYSIS: It's the talk of politicians - affordable homes for all Kiwis - but what exactly does that mean these days?

Earlier in the week Social Housing Minister Amy Adams announced the government would build 34,000 new houses over the next decade in response to what it calls the city's housing "challenges".

Labour's answer to the housing "crisis" is Kiwibuild, which promises to build 100,000 affordable homes over 10 years and on-sell them at varying prices depending on size and location.

Auckland's not cheap to live in but can election year promises actually make affordable housing a thing?
SIMON MAUDE/FAIRFAX NZ

Auckland's not cheap to live in but can election year promises actually make affordable housing a thing?

Only first home buyers would be able to buy Kiwibuild homes and would have to hold them for at least five years.

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So what's affordable under Labour?

CAMERON BURNELL/FAIRFAX NZ.

Andrew Little talks through Labour's housing policy, including a crackdown on a tax loophole exploited by property speculators.

Homes outside of Auckland would be under $500,000 - in the case of Hamilton and Hutt Valley those houses would sell at a maximum of $350,000.

But with the price of land through the roof in Auckland those figures aren't realistic and for an apartment or terraced housing Labour sets affordable at a maximum of $500,000 and a standalone house at between $500,000 and $600,000.

This is in comparison to the government's affordable housing aimed at first home buyers, which comes under the Kiwisaver Homestart cap of $650,000.

Social Housing Minister Amy Adams was the face of an announcement this week to build 34,000 new Auckland houses over the ...
FAIRFAX NZ

Social Housing Minister Amy Adams was the face of an announcement this week to build 34,000 new Auckland houses over the next 10 years.

The Crown Building Project announced on Tuesday will deliver around 13,500 newly built social houses and 20,600 new affordable and market homes.

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Some of those houses had already been announced in previous projects according to Adams' office but the 24,000 to be built by Housing New Zealand are all new.

Overall at least 20 per cent of them will be affordable although Adams has since updated that figure to up to 50 per cent - 20 per cent is the minimum.

So how expensive is the country's largest city, Auckland?

Earlier this year it was named the fourth least affordable housing market among 92 major cities in nine countries.

The figures from the latest Demographia survey revealed 10 times the median household income in Auckland is needed to buy a median-priced house, which cost $830,810.

Among major markets Auckland trailed only Hong Kong, Sydney and Vancouver.

At that rate ANZ senior economist Phil Borkin said a new buyer would need to fork out 50 per cent of their disposable income to meet mortgage requirements.

At the Labour Party Congress on Sunday Labour leader Andrew Little announced their plans to take the tax loophole away from property speculators to even the playing field in favour of first home buyers.

That means stopping property speculators from offsetting losses from their rentals against other income for tax purposes - in short, cutting off speculators from claiming taxpayer subsidies.

How much that will help young Kiwis trying to get on the property ladder remains to be seen but Little is adamant "mum and dad" investors who bought rentals as a long term investment won't be affected by the changes.

Conversely the government's announcement this week is less a first home buyers programme and more a stepping stone approach.

Homelessness and a dearth of social housing has been grabbing headlines for more than a year and Adams' announcement concentrates more on fixing up the current supply and adding to it.

Property for first home buyers comes second to that and in theory it's about creating opportunities for families wanting to make the move out of social housing and into their own home.

So in reality that's less about the young families or renters looking for their first big purchase and more about transitioning families out of a growing dependency on state houses.

But at $650,000 a pop in Auckland that could be a step too far.

Not everyone is convinced you need to spend that kind of money to build an affordable home though. 

This week NZ First MP Tracey Martin was quoted saying an affordable home was about $300,000.

Tough to see how that would work in Auckland with the price of land breaking all sorts of new records.

If anything it proves the point that affordable is a vague term and really does mean all things to all people.

 - Stuff

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