Housing costs in a muddle

Warwick Blagrove, of Habitat for Humanity, says one of their houses would cost anyone else $460,000 to build. Photo / Michael Craig

Charity backs Labour's figures for building affordable Auckland homes.

Labour seems to finally have its figures right, according to New Zealand's leading house-building charity.

Houses can be built in Auckland in the mid-to-high $300,000s, if economies of scale offer enough discounts.

Just how much it would cost to build affordable homes, particularly in Auckland, has been up for debate over recent weeks.

Labour originally said that under its KiwiBuild scheme, 100,000 homes would be built and sold for $300,000.

Last week leader David Shearer said that was a national average price and Auckland stand-alone houses would sell for up to $550,000.

He then revised that down and said that in West Auckland new houses could sell in the $300,000s.

Habitat for Humanity, which builds homes for needy families, receives big discounts on its materials and has teams of volunteers working for free constructing the houses.

Building manager Warwick Blagrove said a typical four-bedroom home on 106sq m would cost $130,000 to build, including discounts of about $70,000.

Without the discount it would be $200,000 for materials and council permits.

That price does not include the cost of labour, which he estimated would be another $130,000, or the land price.

At the moment the cheapest sections in Auckland he could find were on sale for $130,000.

All up, without any discounts or volunteer labour, a four-bedroom Habitat for Humanity home would cost about $460,000 to build.

Labour had said bulk purchasing would cut costs by about 30 per cent - reducing the estimated $460,000 build price to $322,000.

But Blagrove said things like council costs could not be discounted. Taking into account development contributions and permits, that cost was usually about $25,000.

"For resource consents it's an open chequebook," he said.

Conrad Lapointe, Habitat for Humanity's executive officer in Northland, said there were cheaper sections available further north.

Sections could be found in Dargaville for less than $40,000. "But where are the jobs for people to pay their mortgages?"

Under the Habitat scheme, the selected families owe the charity the value of the house on their moving day - in the case of the four being built in Mangere, about $330,000.

For 10 years, they are charged 75 per cent of market rent and are able to pay off that debt at an interest rate of 2 per cent.

After the 10 years, they must get a loan from the bank to buy the house.