Housing crisis to worsen despite Government's KiwiBuild policy

First home buyers, you might want to look away because things are still bleak - the housing crisis going to get worse before it gets better.

The Government's flagship KiwiBuild policy aims to meet the huge demand for new homes that is driving the housing crisis.

But documents obtained by Newshub show that, even if KiwiBuild targets are achieved in the next few years, it won't even scratch the surface of the shortage. In fact, the shortage of homes is actually expected to grow.

Te Kauwhata, North Waikato is the latest KiwiBuild location and a much nicer view than the grim reality of New Zealand's housing crisis.

The documents show that just to accommodate population increase over the next two years, we need to build 40,000 houses a year - but it's likely only 30,000 will be built per year.

That means even if the Government hits its target of 6,000 KiwiBuild homes over the next two years, the housing shortfall which is currently 71,000 won't fall at all - in fact it's expected to increase to 85,000.

Despite that advice Housing Minister Phil Twyford is adamant he can turn it around.

"I would hope in the next few years, let's say two or three years, we'll see that shortfall whittled away by the supply that is in the pipeline," he says.

As a consequence of the shortage, housing will become more expensive.

The briefings explicitly state that "for at least the next two years strong demand for housing including rental properties...will continue to increase house prices and rents".

And it says KiwiBuild won't actually have any effect for another two to three years either.

"Ideally we would have started on this work five years ago but we are where we are I think we've got alongside KiwiBuild a whole raft of other policies that are designed to reign in demand," Mr Twyford says.

The strong demand for housing is still being driven by high immigration figures.

The Minister says there are policies in place to address that and net migration is trending downward. Perhaps not quickly enough.

"We're not going to crack this tomorrow but the foundations have been well and truly laid to turn this crisis around," Mr Twyford says.

This is terrible news for first home buyers - but it's also terrible for the Government.

If these predictions eventuate it means they'll head into the next election not only having made no dent in the housing shortage but actually having it get worse under their watch.