A senior mortgage advisor is warning that the government's flagship KiwiBuild project is in danger of becoming worthless if it can't deliver.
KiwiBuild houses in Wanaka. Photo: RNZ / Tess Brunton
There's now more uncertainty about the programme after the housing minister and the prime minister wouldn't confirm outright whether the target of building 100,000 new homes in a decade still stands.
About 40 percent of Mortgage Lab clients are first home buyers hoping to get their foot on the property ladder.
Chief executive Rupert Gough said while buyers were encouraged to look at all their options and not hedge their bets on the ballot, the idea of a $650,000 KiwiBuild house was an attractive one.
"The KiwiBuild programme is still $100,000-$150,000 less than what they'd pay for a normal home so the KiwiBuild programme would be a welcome asset to a first home buyer, however, if they can't produce them fast enough then it's pretty worthless."
Since coming into power Labour and Housing Minister Phil Twyford have been under pressure to deliver affordable homes as quickly as they promised.
That was 1000 homes by the start of July, rising to 5000 homes next year, 10,000 the year after that, and then 12,000 each year until 2028.
But only 80 have been built so far and earlier this year the annual targets were scrapped.
Now doubt has been cast on whether the 10-year goal is attainable.
Mr Twyford is recalibrating the scheme but won't yet say whether the government will stick to the 100,000 target.
Phil Twyford says Cabinet will review KiwiBuild's status next month. Photo: VNP / Phil Smith
When asked by National MP Judith Collins if the government was willing to commit to it, Mr Twyford said it would not "back away from building large numbers of affordable homes for Kiwis", but did not directly answer the question.
When asked in parliament yesterday, Mr Twyford said there had been no change to that target.
"Cabinet would consider the KiwiBuild reset in June and it's inappropriate for me to speculate on what Cabinet may or may not decide.
"What has changed is that the housing market and the programme need to respond," he said.
Mr Gough said he never thought the target could be reached. "Even if they left it at the 100,000 target they're not going to make it but if they make 60,000 that's great. They do need to recalibrate, maybe how developers qualify to become a KiwiBuild developer, what they can do to produce those houses faster, how they can consent them faster."
He said in the meantime the market had slowed in first home buyers' favour.
"A lot of investors are holding back at the moment, foreign buyers are almost out of it now totally, so first time buyers it's their time to shine really. Specifically in Auckland the market may have come back five, ten percent so what was possibly unaffordable last year may now be into their realm where they can afford it."
KiwiBuild never 'a silver bullet'
A spokesperson for The First Home Buyers Club, Lesley Harris, said there was a wave of disappointment when interim targets were abandoned in January.
"I do think there's a sense of negativity when things get announced, then numbers get reduced. I think there's an element of people going: 'Well, maybe it was a little bit too good to be true'.
"If there's talk of it being reduced further there's just that general sense of 'well it's not what we thought it would be'."
However she said it was never designed to be a silver bullet.
"From my perspective I think it was always designed to be one thing to actually assist with the crisis, but it never was really designed, or it never appeared from my opinion that it was going to actually solve the problem."
Deputy Prime Minister Winston Peters said often getting things started wasn't easy. "And it was never going to be easy, but I'm very confident we'll do a whole lot better over the next ten years with this sort of drive and impetus and commitment than 100,000 homes."