Twyford hopes Kiwibuild will drive down construction costs

Jun 29, 2018 | News

At a media briefing today, Twyford said the government wants to trim building costs for Kiwibuild with productivity improvements such as prefabrication.

Construction companies “want to expand the industry, they want to build more, and they know there’s a significant unmet demand,” Twyford said. “The idea is more volume and more certainty. The construction industry is so volatile, it goes up and down in such an extreme way that firms are very reluctant to build internal capability and take on more staff because they know the cycle is going to come and they’re going to have to lay people off.”

The cap on what Kiwibuild houses can cost is between $500,000 and $650,000 in Auckland and Queenstown, depending on the number of bedrooms, and $500,000 for the rest of the country. Twyford said he’s focused on that as a limit, not a target, with plans to sell the first 30 Kiwibuild three-bedroom homes in Papakura for about $579,000.

Private developers still make their normal margins on Kiwibuild houses and the government builds in an administrative margin of about 1 percent, Twyford said, so will sell them “basically at cost”. Kiwibuild means developments which have been stalled due to lack of available credit can be brought to market with a guaranteed proportion of affordable homes, he said.

Stephen Barclay, head of the KiwiBuild unit, said the government can help reduce developers’ margins, which are typically related to the risk of the project, because it can cut the risk developers incur from land ownership and the cost of holding that land for a large period of time.

“We can assist with that because we have a reasonably large balance sheet,” Barclay said. “They can still make their margin in percentage terms because we’ve reduced risk for them, but we can overall reduce the cost of the development and get the houses at those price points. We’re finding that through the buy-off-the-plans process that’s very attractive to developers.”

Twyford anticipates demand will outstrip supply for the housing and houses will be allocated by ballot. The conditions for qualifying for that ballot have not yet been announced, as they’re yet to get Cabinet approval, but Twyford said similar conditions would apply as for withdrawing Kiwisaver funds to buy a house, which is possible for people buying their first home or for “second chance” buyers who have previously owned a home but no longer have that home or sufficient assets to buy another.

Preference might also be given to would-be buyers who already live in the area where Kiwibuild houses are developed, to prevent gentrification, Twyford said.

Read the article on Scoop here.

Recent articles

Anti-Social Behaviour notes Nov 21

Anti-Social Behaviour notes Nov 21

Tenants Protection Association (Chch) Inc. Notes for presentation at Tenancy Management Community of Practice Nov 2021 Anti-Social Behaviour notes Nov 21

Annual Report

CHA’s 2020/21 Annual Report

CHA’s 2020/21 Annual Report

Strategic Plan

CHA’s Strategic Plan 2018

CHA’s Strategic Plan 2018

Featured Network

Residential Tenancies Act Community of Practice

Residential Tenancies Act Community of Practice

Our Place

Our Place 2017

Our Place 2017

Case Studies

Media Releases


Anti-Social Behaviour notes Nov 21

Tenants Protection Association (Chch) Inc. Notes for presentation at Tenancy Management Community of Practice Nov 2021 Anti-Social Behaviour notes Nov 21

Tenancy Management COP November 2021 summary

tenancy-management-cop-november-2021-summary The final Tenancy Management Community of Practice for 2021 was held via zoom on 11th November 2021. This Community of Practice is relevant for advocates, practitioners, navigators and tenancy managers involved in...


Community Housing Aotearoa (CHA) Newsletter 12 October 2021

Message from Chief Executive, Fortnightly Sector Zoom Calls, Tenancy Management Community of Practice, Ngāti Toa Secures A Deal To Ensure High Quality, Healthy And Affordable Homes At Kenepuru Landing, More Progressive Home Ownership Opportunities for First Home...




Te Whakaruruhau Report

The Te Whakaruruhau Report establishes the peak body services to the Homelessness Sector by Te Matapihi he Tirohanga mō te IwiTrust and Community Housing Aotearoa. The report can be found here: Te Whakaruruhau September 2020


BRANZ research report on ‘exceeding the minimum’ released

This report looks at the question: why don’t landlords choose features that exceed the minimum building standards and what are the enablers to changing this? The aim is to identify the barriers to an improved rental stock and potential solutions to overcome the...

Community Housing Aotearoa

Contact Us

Contact Info

Level 11, Ranchhod Tower,
39 The Terrace /
102-112 Lambton Quay
PO Box 11543
Wellington 6142

+04 385 8722

Follow On