The measures would make a "dent" in Auckland's housing crisis.
The measures would make a "dent" in Auckland's housing crisis.
Moves to free up 500ha of state-owned land to help counter spiralling Auckland house prices are being welcomed by commentators as a means to address a critical supply shortage.
But the number of 'affordable' properties that will be built is yet to be determined and warnings emerged last night thatthe new housing measures were no quick fix.
"Home-buyers should not expect house prices to drop, or house price inflation to slow down, as a result of the announcement," Property Institute chief executive Ashley Church said.
While the measures would make a "dent" in Auckland's housing crisis, it could take two to three years for up to 10,000 new homes to be built. Buyers should expect the new homes to be selling at market rates when they eventually hit the market, Mr Church said.
"There's no suggestion that the Government or private developers are proposing to subsidise the price of these houses - so people shouldn't expect a sudden flurry of 'cheap homes' coming on to the market in 2017 or 2018."
The Government has set aside $52.2 million to fund its new plan to partner with private developers and build thousands of lower-cost homes on swathes of Crown-owned Auckland land.
Housing and Building Minister Nick Smith said a capital contingency fund had been established for the policy.
The money would be used to purchase land parcels from relevant agencies such as Housing New Zealand and departments of defence, education and transport then make it available to private developers.
Dr Smith said a proportion of the homes would have to be "affordable", with a likely price cap of $550,000 to match the eligibility rules of the KiwiSaver HomeStart scheme. The actual number of affordable homes was yet to be nailed down and it was too early to predict when the first of the new properties would be built, he said.
Dr Smith estimated that between 4500 and 10,000 houses could be built on the new land parcels, depending on the size of the sections and the intensity of developments.
He hoped to have the first development agreement signed within six months and that homes could be built within two to three years.
PricewaterhouseCoopers labelled Auckland's housing market "the most toxic risk to the economy". But it welcomed supply-side measures to dampen demand alongside the Reserve Bank's minimum deposit restrictions and new moves to tax capital gains on residential property.
It also backed Auckland Council warnings about ensuring critical infrastructure such as transport links were in place for new housing areas.
"The success of the greenfields areas in the south of Auckland will be utterly dependent on the ability for the transport network to connect people's homes to their places of work."
Bankers Association chief executive Kirk Hope said the latest measures would aid housing supply and affordability, especially in Auckland. "It's good to see the Government moving to strengthen tax rules on residential property and bolstering IRD's resources in this area."
Deputy Auckland mayor Penny Hulse said the Government would have to help Auckland meet the cost of critical new infrastructure.
Meanwhile, an extra 3000 tenants will be entitled to the income-related rent subsidy under changes outlined in the Budget.
Social Development Minister Paula Bennett said the change would increase the number of available subsidies to about 65,000 tenancies by 2017/18, helping those most in need.
And changes to KiwiSaver mean membership in a complying superannuation scheme will now count towards the three-year eligibility for first-home withdrawals, though the number of people affected was unavailable last night.
"This means more KiwiSaver members have access to their savings to assist with the purchase of a first home."
Highlights
• $52.2 million capital contingency fund to partner with developers and build thousands of lower-cost homes on 500ha of Crown-owned Auckland land.
• New 'bright-line' test from October 1 to tax capital gain on residential property sold within two years of acquisition that is not owner's main home.
• New measures to track non-resident foreign buyers by making them provide an IRD number, tax identification number from their own country and current identification
The Herald has revisited voters featured in the paper this week for their verdict on the Budget.
State house tenants: Mathew and Tuhe Tauia
Tuhe and Mathew Tauia, with children Marcel, 7, Teilian, 10, and Tebora, 4, of Massey, hope more houses will be built. Photo / Nick Reed
The Tauias are "pretty happy" with the Budget.
The couple, who are both support workers for disabled people, dream of buying their own house but said before the Budget: "With the prices in Auckland we can't afford it here."
Last night, they welcomed the $52 million fund for developing housing on Crown land in Auckland, hoping that more affordable houses will be built.
Mr Tauia, a board of trustees member at Royal Rd Primary School, said the extra funding for preschools, childcare and special needs education was good. "Overall, pretty happy," he said.
However the couple's joint income of $80,000 means the increased in-work tax credit announced in the Budget will be reduced to just $2 extra a week for them, and their income is too high to gain from the higher childcare subsidy for families earning below $800 a week ($41,600).
Both adults are already in KiwiSaver, but they will still be hit by the loss of the $1000 kickstart payment for new KiwiSaver accounts. "We were actually planning on it for our kids," Mr Tauia said. "It's a bit late now."
They will also be hit by the surprise new travel levies expected to be about $6 for departing passengers and $16 for those arriving, because they try to go home to see relatives in Rarotonga every two years.
'Housing fix will be too slow'
The first-home hunters: Natalie and Glen Allison
First-home hunter Glen Allison sees little in yesterday's housing policies that will help him in his immediate quest to get on to the property ladder.
He and wife Natalie live in Henderson. They work in the city but want a house in West Auckland. They have already been to three auctions and spent more than $1000 on due diligence with nothing to show for it.
Mr Allison said moves to free up land and build more houses were a step in the right direction, but they did little to help his family in the short-term. "It's a bit of a long-term fix. We're looking at the moment so having a fix two or three years down the track doesn't help now."
Both in their 30s, the couple have been focusing their search in Glen Eden but are prepared to consider anywhere in their $600,000 price range, provided it is in a reasonable area, with decent transport links and good schools for their young daughter.
"We started in Ranui; nice houses, nice area but the schools were decile one and had warnings about them so we had to walk away. We couldn't do that to our daughter." Using KiwiSaver, the couple have enough for a 10 per cent deposit and will have help from family for the rest.
Mr Allison did not believe the new tax on capital gain, which will apply to residential property sold within two years of purchase from October, would have much of an effect. "Most investors in the property market will be quite smart and hold on for two years and one month."
He would like to see sellers forced to pay for LIM and builder's reports to help alleviate significant due diligence costs for first home buyers.
