Why KiwiBuild failed to deliver in Wanaka

Stuff reports that Phil Twyford failed to address Wanaka’s housing shortage. Quote.

While early ballots for KiwiBuild homes were swamped by applicants in Auckland, in Wanaka the deadline had to be extended due to a lack of demand.

In the end, three of the ten houses offered went unsold, a grim start for the Government’s plans to sell more than 200 KiwiBuild houses there in the coming years.” End of quote.

So why couldn’t KiwiBuild sell its Wanaka houses marketed for only $565,000?

The answer is so simple that it’s embarrassing – KiwiBuild did not understand that Wanaka’s shortage was not of houses for their target market of first home buyers. Quote.

As well as retired farmers and cashed-up Aucklanders relocating, an apparently?significant source of demand for houses is local business owners buying them to rent?to their employees?at below market prices. Otherwise the staff quickly leave in frustration.

Far from being able to buy a house, many of the workers of Wanaka struggle to rent there,?creating something of an underclass, forced to squeeze in wherever they can. End of quote.

Wanaka’s housing demand is driven by retirees and business owners who work from home and want the lifestyle. This has created a housing boom but these are not first time home buyers.

Wanaka’s housing shortage is in rental accommodation and?KiwiBuild did not analyse the Wanaka market well enough. They simply recognised the housing boom and the vacant sections allocated for residential homes and jumped right in.

In October 2017 Stuff reported. Quote.

… an increase in the [Wanaka’s] permanent population of more than 100 per cent since the turn of the century, 5.5 per cent in the last year alone ? more than twice the national average?? suggests that this once quiet lakeside resort is a secret that many, many more are finding out about, and fast.

…There were 351 new dwelling consents issued in the year to July, and 698 new residential lots approved for resource consent in the same time period. Thousands more sections are earmarked for development in the next few years and more than 80 real estate agents are working in the town.End of quote.

Wanaka Building Consents 2014 to 2017? Stuff.co.nz

The housing boom attracted the construction industry to Wanaka and possibly encouraged the council to speed up processing housing permits.

KiwiBuild were desperate to meet their promised target numbers. Bingo, a marriage of convenience between supply and demand -?to be followed by an expensive divorce!

The expensive lesson learned at Wanaka will be part of the reason that KiwiBuild is being repackaged as the Urban Development Authority (UDA).

We need affordable rental housing, particularly in tourist areas.? Whether the UDA will widen its net to pick up this wonderful business opportunity and deliver on providing it, remains to be seen.? If only we had sensible business heads to take advantage of this great business opportunity…