'Straight lie' that National didn't build houses - ex-Housing Minister Nick Smith

National MP and former Housing Minister Nick Smith has taken a hammer to KiwiBuild, saying Labour's "partnering with the private sector no differently to what we did".

Thousands of hopeful first-home buyers have applied for KiwiBuild homes, despite the $650,000 price cap being more than double what Labour first said it would be while in Opposition.

But there will be a long wait for most applicants - only 1000 are expected to be built in the first year of the scheme, and 5000 in the second, eventually rising to 12,000 a year to meet the 100,000 in 10 years target.

Labour says the previous National-led Government was negligent when it came to housing, failing to do anything to stop prices spiralling out of control.

Dr Smith, who was Housing Minister between 2013 and 2017, says it's a "straight lie" that National didn't build houses when it was in power.

"When I became minister, we were building 15,000 houses a year, five years ago. Last year we built 31,000 houses - that's a more than doubling," he told The AM Show on Friday.

"Labour is claiming National didn't build any houses - that's just not true."

Nick Smith.
Nick Smith. Photo credit: Getty

Statistics NZ data shows when Dr Smith took over the housing portfolio, there were indeed around 15,000 consents for new dwellings. And last year, there were about 31,000.

Statistics NZ says around 97 percent of consents result in houses, on average 10 months after they're approved.

Consents have continued to rise since the change of Government - up 2.5 percent nationwide in the year to March, and up 9.7 percent in Auckland.

While an improvement on the post-global financial crisis low, building activity is roughly the same as it was in 2004, and well behind the mid-1970s high of 41,000 consents a year. Statistics NZ also says last year there were 9000 fewer houses built than needed to keep up with population growth, two-thirds of that shortfall in Auckland. 

Labour MP Louisa Wall appeared on The AM Show alongside Dr Smith, and said National didn't build any at all. It's true that KiwiBuild is putting taxpayer money into building new homes and buying off the plans, while National's approach was to encourage market conditions that would entice private developers to build more affordable housing.

Dr Smith said this will "make a greater difference to improving home ownership rates and New Zealand's housing challenges than the spin we are getting from the Housing Minister today".

"Three years ago I introduced the HomeStart scheme, which helped 50,000 first-home buyers into their homes," he said.

As of September last year when National lost the election, 31,000 New Zealanders had used the HomeStart grant according to a release put out by Dr Smith. The scheme, which offers up to $10,000 to buy an existing home or $20,000 for a new build, is still running. The Government last year estimated around 20,000 people would benefit each year.

Dr Smith also has a problem with the upper income limit for KiwiBuild applicants - $120,000 for singles and $180,000 for couples. Housing Minister Phil Twyford said they had to be this high - about double the median incomes for single people and households - because house prices are so high. 

"A couple of teachers may have a combined income of between $150,000 and $170,000," he said earlier this week. "For a nurse and police officer earning upwards of $120,000, and for an engineer living alone, $90,000.

"A decade ago these families would have been able to afford a home, but they are now locked out of the market."

But Dr Smith said letting couples on $180,000 between them was "hardly helping our low- and middle-income earners".