KiwiBuild decoded

Got questions about the KiwiBuild scheme? We explain what it is and how it works.

New houses

KiwiBuild has garnered headlines and criticism in equal measure. We explain what the scheme is and how it all works.

What is it?

First home buyers have increasingly been left behind in a market where average house prices have soared at more than 9% annually since early 2015. The $2 billion government scheme aims to alleviate some of this pressure by providing 100,000 affordable homes over the next decade.

How it works

The government buys houses off a developer’s plans for a fixed price. This not only locks in the price for a potential buyer, but also helps the developer. To get funding from a bank to get a new project rolling, developers usually need to have a certain number of properties already sold off the plans. Therefore, if a lot of their unbuilt homes are already snapped up, developers should, in theory, find it easier to get financing. The flipside is developers are then locked into building a certain number of cheaper houses.

The maximum price for three or more bedrooms is fixed at $650,000 in Auckland and Queenstown. Two-bedroom houses are capped at $600,000, while a one bedroom or studio is limited to $500,000. The maximum price is capped at $500,000 in other centres but, at this stage, there is no further breakdown based on bedroom numbers.

What if I sell up?

You have to apply to rent out or sell within the first three years, and you’ll lose 30% of the capital gains if you do. After three years, it’s fair game and you can do as you please.

Who can buy them?

Buyers must be New Zealand citizens or permanent residents and intend to live in the house for at least three years. Owners are allowed to rent out rooms in the house but they must still live there.

First-time buyers can’t earn more than $120,000 per annum as a single person (the limit for a couple is $180,000). Second-chancers (people who have previously owned a house but no longer do so) can only have assets worth $120,000 in Auckland, $100,000 in the major cities or $80,000 in other areas.

Where are they being built?

Half of the homes are set to be built in Auckland and the rest in other areas with high demand and affordability issues. Most are likely to be built in the main centres.

When are they getting here?

The plan is to build 1000 homes in the first year, 5000 in the second, 10,000 in the third before ramping up to 12,000 per year after that. When the scheme is going full bore it’ll need to deliver nearly 33 homes per day to hit these targets.

The government has admitted the scheme is already running well behind schedule. At this stage, only 47 homes of the promised 1000 have been built.

The process

  1. Register your interest at kiwibuild.govt.nz. This means you’ll get updates when houses in your chosen area are becoming available.
  2. Pre-qualification – this makes sure you meet the eligibility criteria for KiwiBuild. You need:
    • proof of residency
    • proof of income
    • financial pre-approval from your bank or mortgage lender and evidence of your deposit
    • a signed and notarised KiwiBuild Statutory Declaration.
    Once complete, pre-qualifying means you’re in a position to enter ballots for a new house. Your pre-qualified status only lasts six months, so only do it when you know houses are being built in an area you’re interested in.
  3. Choose a development you’re interested in and enter the ballot by picking the house you want. You can opt for several houses, but doing that means you might not win the one you wanted.
  4. Complete the sale as per the usual process.
  5. Get the keys and move into your new home.

Member comments

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Steve S.
02 Mar 2019
Kiwibuild house quality

I'm curious about the quality of the Kiwibuild houses. Clearly thy're being built down to a cost standard so they're affordable rather than up to a quality standard. We know how deficient NZ's building code is, and how easy it is to build new homes that are potentially cold, poorly ventilated, mould-prone and unhealthy. How good are these new Kiwibuild homes?

Consumer staff
04 Mar 2019
Re: Kiwibuild house quality

Hi Steve,

The quality of the houses will be no different to any other new development and will be expected to meet the current building code. There are some KiwiBuild developments that have gone above the code and some more in the pipeline which is very good to see. You can check out the Belmont Village in Pukekohe where the houses have met the Homestar 6 rating. These houses will be guaranteed to perform better than a house that just meets the code. Hopefully when the scheme ramps up fully, this will become the minimum requirement rather than a lofty target.

Kind regards,
James - Consumer NZ writer