Thursday, 14 February 2019

RBNZ: KiwiBuild won't add to housing stock in 2019

The Reserve Bank has landed another blow on KiwiBuild, predicting it won’t add to the housing stock this year and will reduce private sector building over the coming years, says ACT Leader David Seymour.

After forecasting last August that KiwiBuild would begin to add to overall residential investment from the middle of 2019, the Reserve Bank now assumes the net contribution of KiwiBuild will be almost zero this year.

The Bank also says that most of the houses delivered through KiwiBuild will be offset by crowding out of private sector developments over the next few years.

“It’s not surprising the Reserve Bank predicts KiwiBuild won’t add to our housing stock when the Government is just buying existing homes, putting a KiwiBuild logo on them, and adding a set of rules around who can buy them.

“KiwiBuild is a distraction from the real problem of high land prices which could be alleviated by cutting planning red tape.

“Labour needs to introduce a package of reforms that will free up building everywhere.

“It can achieve this by replacing the Resource Management Act with a law as set out by the Productivity Commission in Better Urban Planning. Such a law would set out infrastructure plans and let people build around it without restrictive zoning such as the municipal urban boundary.

“The Government should let councils issue targeted rates to pay for infrastructure for new developments and, if they really want to see building go ahead, get councils out of the building consent and inspection business. Councils are the bane of a builders’ existence and they didn’t stop leaky buildings anyway. Mandatory private insurance of new builds would be better.”