'This is their last chance': First home buyer's message over KiwiBuild reset

A first home buyer is telling the Government he thinks the KiwiBuild reset could be their last chance to get things right.

Wellington man Stephen Gallagher is looking for a first home, and says the Government's announced KiwiBuild recalibration is giving him hope.

"I think it will make it easier for me as someone trying to buy a home in the next six to eight months - it's really important for me," he told Newshub.

"I think this really is their last chance to do it, this is what they (Labour) built their election campaign on."

The changes announced on Wednesday will also affect property developers who have invested in Labour's flagship policy.

Property developer Gary Gordon is building 69 KiwiBuild properties in Auckland, and for nine months, since the reset was announced, he's been in limbo.

"[There has been a ] lack of clarity around exactly what it is or what's coming and I think that may well have put some people off," he told Newshub.

Kiwibuild was effectively reborn today with Housing Minister Megan Woods saying, "most good things take nine months to gestate".

She announced that the whole premise of the KiwiBuild policy - to build 100,000 affordable homes in 10 years - has been scrapped.

"We will focus on building as many homes as we can, as fast as we can."

It turns out the promises were just too big.

Wellington man Stephen Gallagher is hopeful the reset will make it easier to buy.
Wellington man Stephen Gallagher is hopeful the reset will make it easier to buy. Photo credit: Newshub

"As a Government, we have a commitment to not bloody-mindingly pursue a policy because we set it a few years ago, but actually having the courage to call time on it," Woods said.

She said the targets set for the policy were driving it off-course.

"I think the fact that we did have those targets, that the targets became all-consuming, for everybody."

That resulted in houses being built where they weren't wanted, and now nearly 500 homes already planned or built will be up for grabs.

Woods described the reset as "clearing the decks of what hasn't worked".

Clearing the decks means flogging 211 contracted or built KiwiBuild properties in Wanaka, 175 in Te Kauwhata and 75 in Canterbury, to be sold on the open market.

Those contracts were worth a combined $207 million.

"They could end up in the hands of speculators after being put on the open market," Woods admitted at her press conference.

The National Party's housing spokesperson, Judith Collins.
The National Party's housing spokesperson, Judith Collins. Photo credit: Newshub

National's housing spokesperson Judith Collins is sceptical.

"If anybody really, seriously would like a ski chalet in Wanaka, boy does Megan Woods have a deal for you," she joked. "It's a disaster."

To prevent more failures like those developments, the Government guarantee for developers will be tightened, meaning they will get less cash from the Government.

But as Gordon pointed out, tightening the guarantee for KiwiBuild developers could put them off.

Woods said it would "increase the incentive to sell to KiwiBuild buyers when they don't, they will get less".

Gordon said while that brings some certainty for developers, he said he's "not sure how many people will be wanting to line up if the underwrites are just getting more difficult".

And there are other big changes coming for policy.

The rules were that KiwiBuild buyers must live in the house for three years before they could sell it. Now, those moving into one-bedrooms can flip it after one year.

And second chancers - that's people who might have owned a home before but have, for instance divorced, they could have no more than $120,000 in assets to be eligible. But now, you can have all the money in the world.

What's more, your second chancer status doesn't have to be the result of a divorce. People selling up and moving to cities will be eligible too.

Collins is labelling the recalibration a "retreat".

Newshub.

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