More bad news for Phil Twyford

Phil Twyford has been banging on about affordable homes and KiwiBuild for quite some time.

When it was pointed out to him that almost no one could afford his KiwiBuild homes he scoffed at the researchers and disregarded their findings. Now another study, this time from Auckland Counil’s chief economist, backs up previous data: Quote:

Three-bedroom “affordable” homes on the market for $650,000 under Phil Twyford’s Kiwibuild programme would be out of reach to more than half of Aucklanders, a study from the city’s council suggests.

A study from the Auckland Council’s chief economist looked into home affordability in country’s biggest the city.

As well as finding that middle-income earners had been the hardest hit by declines in housing affordability, it suggested a three-bedroom home at the top end of price range of the KiwiBuild scheme is likely to be out of reach for half of Auckland’s households.

KiwiBuild aims to build 50,000 homes in Auckland in the next 10 years. The caps on the costs of KiwiBuild homes in Auckland are $650,000 for a three bedroom house, $600,000 for a two bedroom and $500,000 for a one bedroom. Twyford said the Government hoped it would be able to secure them for less than that in some areas. A spokeswoman this afternoon stressed the $650,000 was the maximum price for these homes and said the first homes under the programme in Papakura will be sold for $579,000. End quote.

Twyford raised those limits the moment he got into government, and now even those limits are too high. As usual, Twyford thinks he knows best and ignores the key findings that his KiwiBuild plans are a farce: Quote:

This report shows the desperate need for the KiwiBuild programme,” Twyford said in a statement.

“The national housing crisis is locking a generation out of the dream of homeownership,” he said.

“Many New Zealanders would be surprised that this now includes professional families.

The need for affordable housing is greater than ever. All KiwiBuild homes in Auckland will be under the $650,000 price cap.End of quote.

All? I look forward to seeing that happen. It won’t of course. Quote:

The council said that its study discovered a household would need to be making $105,200 a year – in the top half of income earnersand already have a 20 per cent deposit in the bank to afford a KiwiBuild home at the $650,000 cap.

If a household only has 10 per cent deposit, the council says a family would need to earn $118,300 a year to afford a $650,000 KiwiBuild home.

“To deliver houses that even households in the top half of earners could afford, Kiwibuild would need to deliver a lot of houses below the $650,000 cap,” council senior economist Harshal Chitale says. End quote.

Which is precisely what MBIE officials and others have found, and Twyford dismissed the numbers and scoffed that they were wrong: Quote:

The council’s chief economist unit also says Auckland’s squeezed middle-income earners have been hit the hardest by worsening housing affordability in the city.

It said median housing prices Auckland increased 71 per cent from $494,000 in 2012 to $847,000 in 2017.

Median household income was up by 25 per cent over that time, $78,100 to $97,300.

Chitale said because mortgage interest rates were almost identical in 2012 and 2017 differences in affordability were “driven purely by changes in house prices and household incomes”.

According to the council’s analysis in 2017, the poorest third of Auckland households “had practically no likelihood of being able to purchase a freehold home (whether a stand-alone house, townhouse or apartment) – even with a 20 per cent deposit”.

A household squarely in the middle of the pack could only afford a home in the bottom 11 per cent of the market ($537,000 and below), provided they had a 10 per cent deposit.

If they had a 20 per cent deposit, they could afford a property in the bottom 18 per cent of the market.

“We also examined how affordability by income percentile has changed over the five years since 2012. Practically every household income group saw the range of houses they could afford fall sharply,” Chitale says.

“But the biggest declines were for households in the 50th to 75th percentiles. These middle-class income groups have been increasingly locked out of home ownership,” he said. End quote.

In other words, only the rich will be able to afford KiwiBuild homes and those whom the programme was designed to help will be once again be left out in the cold.

This Labour government seem intent on only assisting rich people: massive study subsidies for rich kids, power subsidies for rich pensioners and, now, KiwiBuild homes for rich people only.