KiwiBuild promise may rely on prefabs - Phil Twyford

The Government hopes to fulfil its KiwiBuild promises by beefing up the prefab house-building industry in New Zealand.

 Housing Minister Phil Twyford told Newshub Nation it will help the scheme, which formally begins in July, reach its target of 100,000 "affordable" homes in a decade.

"The Government will formally invite expressions of interest from construction firms and investors - both internationally and in New Zealand - on how we can work together to establish a modern, offsite manufacturing house-building industry in New Zealand."

The Government has already had discussions with investors here and overseas, he said, including with 2degrees founder Tex Edwards.

"He's very focused on how we can shake up the construction industry in a similar way to what they did with the telecommunications industry - offsite manufacturing is the big opportunity."

A KiwiBuild construction site.
A KiwiBuild construction site. Photo credit: Newshub.

Mr Twyford said the Government would likely underwrite homes built in factories off-site, since banks are reluctant to lend to first-home buyers when it comes to prefabs.

"What the investors and the private sector tell us is that that would give a firm the confidence and the ability to invest in the plant and the technology."

Just how many KiwiBuild homes could be prefabricated remains unclear, but Mr Twyford said it could be more than half.

"I would hope that in a few years when we've ramped up to 10,000, 12,000 a year, a substantial proportion of that would be built in a factory using high-tech, high-precision gear."

In the meantime, traditional building is already underway. The first 18 KiwiBuild homes are expected to be completed in August, with families moving in by October.

Mr Twyford wouldn't say how many people have expressed an interest in buying the homes, except that he expects demand to be very strong, and lucky home-buyers would probably end up being chosen by ballot.

"On July 1, in that first week of the KiwiBuild programme, we'll be setting up a whole process for people to pre-register for these homes."

The former Unitec site in central Auckland was recently revealed as a future site of KiwiBuild homes. Mr Twyford said the Government is looking at another eight "major" sites. He wouldn't say if they were as central as the Unitec site, but said having "really good transport connections" was more important than being close to the city.

They're currently doing due diligence on those sites, and will reveal more details soon, he said.

"The KiwiBuild unit, which is established within the Ministry of Building, Innovation and Employment, that's the embryo of the urban development authority that we hope to establish next year. That's already doing this work and identifying a number of sites, and we'll be announcing some of those sites in the coming weeks and months."

Three-bedroom homes in the KiwiBuild scheme are expected to cost up to $650,000 in Auckland and Queenstown, and up to $500,000 in other areas.