KiwiBuild not aimed at low or middle income households - Economist

Morning Talk 06/07/2018
Image: Newshub.

Housing Minister Phil Twyford announced the eligibility criteria for KiwiBuild homes on Wednesday with an aim of 100,000 affordable homes to be built in the next decade.

Shamubeel Eaqub, economist, author, and commentator, joined Mark Sainsbury on Morning Talk and said that although this is a good step forward it’s not the best solution to the housing crisis.

“They haven’t fixed the underlying problem which is that houses are really expensive in New Zealand.”

More than 19,000 people have signed up for KiwiBuild so far.

The Government's affordable housing initiative was officially opened to the public on Wednesday, and the response has been incredible.

Despite this, Mr Eaqub told Mark Sainsbury that the policy doesn’t seem to be directed at the lower and middle income households but instead it’s targeting the middle and upper income households.

“It seems like their main goal was to increase the rate of homeownership in New Zealand, and that can only be possible for middle and high income households because they’re the only ones able to have a deposit and the ability to repay the mortgage.”

The reality is the people that are renting aren’t always able to afford the 10 percent deposit needed.

First home buyers will need at least a $50,000 deposit to buy the most modest of KiwiBuild homes, as well as paying a mortgage of over $600 per week for 30 years.

Mr Eaqub suggests that a boost to the supply of social housing and an increase in the rental stock through build-to-rent schemes would have made more of a difference than the KiwiBuild scheme.

Listen to the full interview with Shamubeel Eaqub above.

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