Colliers defends KiwiBuild as ‘far from a colossal failure’

Article – BusinessDesk

By Jenny Ruth

Sept. 20 (BusinessDesk) – KiwiBuild is “far from the colossal failure its political opponents have portrayed it to be,” says prominent real estate agent Colliers.

Its residential projects director, Pete Evans, says the construction industry needed time to adjust to KiwiBuild’s requirements and development projects take at least 12 months to be planned, designed and consented, let alone built.

“KiwiBuild has been an easy target for opponents looking to notch up political points. But while it’s true the policy over-promised and under-delivered, it is far from a colossal failure,” Evans says.

He’s citing Colliers’ experience marketing the Fraser Avenue, Northcote development in Auckland of 102 apartments, 72 of which are available to first-home buyers under the KiwiBuild scheme and 30 available on the open market, as proof KiwiBuild is working.

Prices for first-home buyers range from $370,000 to $845,000 for the studio and one, two and three-bedroom apartments which are in five three-storey buildings around a village green. The open market prices are up to $110,000 lower than their valuation.

Evans says in its first week on the market, the development attracted 122 appointments and achieved 50 conditional sales.

“That isn’t the case for the rest of the new apartment market where sales have slowed, according to Colliers’ research,” he says.

“The KiwiBuild developer-underwrite is also achieving what it set out to do by allowing projects to go ahead at a time when there are very few privately-funded projects coming to market,” he says.

“Stubbornly high land and construction costs continue to be a barrier for development.”

The Fraser Avenue developer is Shane Brealey of NZ Living.

Early this month, the government dropped its KiwiBuild target of 100,000 homes over a decade and announced a policy “reset” which includes setting up a new crown agency, Kainga Ora, to be both a public housing landlord and to facilitate urban development projects.

Legislation establishing it passed its final reading in parliament yesterday and Kainga Ora, which will incorporate Housing New Zealand, its development subsidiary and the KiwiBuild unit, is set to begin operating from Oct. 1.

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