The New Zealand government has scrapped its target to build 100,000 homes in 10 years, saying it was “overly ambitious”.
In a major climb-down for the Labour coalition, the flagship KiwiBuild scheme, which was launched in 2018 by prime minister Jacinda Ardern, was dumped and the housing minister unveiled new policies for grappling with the nation’s housing crisis, with hundreds of Kiwis continuing to live in temporary, inadequate or unsafe housing around the country.
Housing minister Megan Woods unveiled measures that include a NZ$400m ($256m) funding for ownership schemes such as rent-to-buy and shared equity, which aims to help low-income families to buy chunks of a mortgage until they own a home outright.
In June, Ardern replaced her housing minister and appointed a team of senior officials to fix New Zealand’s housing problems after KiwiBuild, the government’s flagship project for building 100,000 affordable homes in ten years, missed every several deadline.
As of 4 September, the number of homes built was 258, according to KiwiBuild’s website – thousands less than the target.
Woods did not set any new target for KiwiBuild, saying the government would focus on building as many homes as it could, and targets had led to KiwiBuild homes being constructed in towns such as Wanaka that had no market for first-home buyers, and where they now languished empty for months.
She also said the deposit required for government-backed mortgages would be reduced by half to 5%, adding this would ensure more low- and middle-income New Zealanders could buy a first home.
“When policies aren’t working, we are honest about that and fix them,” Woods said in a statement.
“By making improvements to our build programme, we can get more New Zealanders into warm, dry, secure homes whether they be public, rental or affordable KiwiBuild homes,” she said.
The National party’s opposition spokesperson on housing, Judith Collins, said KiwiBuild was embarrassing and an utter fiasco, and KiwiBuild homes paid for by taxpayers would now be sold at a loss to property speculators or holiday home purchasers on the open market.
“There were no new initiatives to speed up the delivery of houses. All we got from the new housing minister was a commitment to try harder. It’s meant to be KiwiBuild, not KiwiHope,” said Collins. “Labour talked a big game on housing but has failed to deliver meaningful change.”
New Zealand house prices are among the most unaffordable in the world, with Auckland the seventh most expensive city to buy a home, and all three major cities considered “severely unaffordable” by the latest Demographia international housing affordability survey.
Prices have soared nationwide more than 50% over the past decade.
Ardern’s centre-left government passed laws last year that restricted many non-resident foreigners from buying existing homes in New Zealand, as part of efforts to contain house price increases and reduce high rates of homelessness.
Despite these efforts, the wait for a state house is at a record high under Labour and homelessness figures continue to climb around the country.
Reuters contributed to this report
