KiwiBuild houses remain unsold.
The government allocated $2 billion towards the KiwiBuild programme intending to recycle the money through reinvestment after selling homes. It already spent $59 million to buy 90 KiwiBuild homes designed to be built on the basis that it would buy them upfront and 47 that needed to be purchased because they were not selling.
The government received $33 million for on-selling 72 of the houses, which still leaves it $26 million out of pocket.
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A Kainga Ora spokesperson told Interest.co.nz that the government decided to underwrite 2,177 properties via the KiwiBuild programme, while others were bought from developers upfront.
However, the government might buy the properties expected to be left unsold “depending on the nature of the contract and the prevailing market appetite for the homes at the time of completion.”
Housing Minister Megan Woods said it was a mistake to underwrite houses in Canterbury, Te Kauwhata (Waikato), and Wanaka because of the lack in demand in these areas.
Shane Brealey, managing director of NZ Living, added that the government was “overzealous” and had overreacted with its underwriting changes – emphasising that the government should be flexible around the portion of development it underwrites.