Six KiwiBuild homes contracted ‘off the plans’ in November already built in September

Henry Cooke18:26, Mar 07 2019

Developers still sceptical about Kiwibuild

Developers still sceptical about Kiwibuild.

Six KiwiBuild homes contracted ”off the plans” in November had already been built in September, Google Maps imagery shows.

The buying off the plans initiative is generally designed to help developers build affordable homes that would not have been built – or not built in the right price range – if not for the Government’s underwrite of the development.

But six homes now for sale as part of the KiwiBuild scheme in West Auckland can be seen clad and roofed in Google Map imagery from September of 2018, despite documentation showing the final contract was not signed until November.

The six houses for sale for $600,000 in Huapai, west Auckland.
The six houses for sale for $600,000 in Huapai, west Auckland.

The houses had also been offered briefly on the open market.

Fully 104 KiwiBuild homes from developer Mike Greer were announced in February, including the six homes already completed.

Housing Minister Phil Twyford noted at the time that the deal had been “in the works for a number of months” and the developer had “been building while the details have been hammered out, meaning the first homes are already ready to sell”.

KIWIBUILD TRACKER
Labour promised 100,000 new homes in 10 years. Its first deadline is 1000 built by July 1, 2019.
He said on Thursday that the project had been “in train” since June.

“The deal is much wider than the six homes in Huapai and includes 104 homes in West Auckland and Christchurch. Mike Greer has been clear that the agreement enabled him to save costs, lower his profit, and have certainty to build faster. This meant both the homes were cheaper for first home buyers and more homes were built,” Twyford said.

The underwrite scheme basically guarantees the developer that if the homes do not sell through KiwiBuild or sell at a discounted price the Government will pick up the tab.

National’s housing spokeswoman Judith Collins drew attention to the already-built homes in Question Time on Thursday, asking if Finance Minister Grant Robertson was aware that the underwrite was covering homes that already been built.

When the contract was signed in November the Government had not yet admitted it would not make its goal of 1000 KiwiBuild homes built by July 1.

The same six houses in a snapshot from September 2018 on Google Maps.
GOOGLE MAPS
The same six houses in a snapshot from September 2018 on Google Maps.

Collins believed that at this point Twyford was desperate to save that promise.

“The Minister was still saying in late-November that he was confident in reaching his 1000 houses mark. He was signing up anything,” Collins said.

“These are houses that are not adding to supply.”

The same six houses in a snapshot from September 2018 on Google Maps. Some landscape work is still required.
GOOGLE MAPS
The same six houses in a snapshot from September 2018 on Google Maps. Some landscape work is still required.

Twyford said in the House that the KiwiBuild underwrite allowed an existing Mike Greer project to be greatly expanded and include more affordable homes.

“As Mike Greer himself explained in the media, he’d been negotiating with the KiwiBuild unit for several months while he put that development together, and, as he said, the KiwiBuild underwrite allowed him to build a larger development with more affordable homes,” Twyford said.

“It reduced his financing costs, enabled him to reduce his margin and build more affordable homes, and that’s why the KiwiBuild homes are at a lower price than the other homes in that development.”

Collins said she was worried that developers were “rubbing their hands with glee” and taking advantage of the Government’s generous terms.

Well over 10,000 homes have been contracted as part of KiwiBuild, but only 313 potential buyers have completed the pre-qualification process. Just under 50,000 have registered interest, however.

Mike Greer said the prospect of a partnership with KiwiBuild ”allowed us to push ahead with the Huapai development and build homes we otherwise may not have. We formally moved these six homes into the KiwiBuild programme as the contract was finalised.”

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