KiwiBuild Post-Lockdown
One government scheme that many may have forgotten about as Covid-19 walked into town is KwiwBuild, the Government will face some difficult decisions about the shape and direction of the KiwiBuild scheme as we emerge from a post lockdown world.
One undeniable impact on kwiwbuild with be prices – both in the market itself, as well as the cost of actual building supplies and contractors.
As the market slowly kicks back into life in level three, most experts have stated that is likely that prices will be down compared to where they were pre-lockdown, But it could be several months before we know by how much, and even longer before we can plot a likely course for prices in the future as there is uncertainty if the effects will be short-lived, if prices will return to pre-lockdown levels or if the impact will be larger.
Experts predict that this uncertainty could affect KiwiBuild as it works in conjunction with private developers to bring projects to market, Although KiwiBuild can assist those projects get off the ground by providing an underwrite agreement where the developer can provide a specified number of lower-priced homes that are reserved for first home buyers, the developer and their financiers will still need to be confident that they will be able to sell the rest of the homes on the open market and make a profit if the development is to proceed.
And as we head to election month, Kiwibuild and housing will be a hot topic for the government, especially with big projects such as the plan to build around 3000 homes on land that was formerly part of the Unitec campus in the Auckland suburb of Mt Albert. This project was first announced just over two years ago, and promised a mix of social housing that would be rented to people on low incomes via the Government’s housing agency Kainga Ora, KiwiBuild homes reserved for first home buyers, and homes that would be sold on the open market – but we have heard very little about it since.
The building and construction sector also has some uncertainty in it’s immediate future, with building supplies expected to spike as demand on construction becomes high. Experts have predicted that some projects will be put on the back burner as delays and shortages in supplies impact the sector, but Kelvin Davidson, senior economist of CoreLogic, hopes delays may ease the price of the overall costs, ”In turn, a decline in activity will ease the pressures on capacity and labour, eventually flowing through to reduced cost pressures.”