Mt Albert housing project may have little impact for first time home buyers

April 6, 2018

Mt Albert housing project may have little impact for first time home buyers

Prime Minister Jacinda Ardern updates her Facebook followers on the first major affordable housing project alongside Peeni Henare, left, Phil Twyford, and Jenny Salesa. Photo: Lydia Burgham

The first major affordable housing project has been announced in Auckland, but it could still be out of reach for first home buyers.

The project will see between three and four thousand affordable houses built on surplus land on Unitech’s Mt Albert campus.

ANZ Senior economist Liz Kendall says “I think it’s a step in the right direction, but in terms of numbers it’s not very big.”

But keeping the houses affordable may be an “ambitious target” for the government.

“In the current environment you’ve got reasonably high construction costs, high land costs, and that’s going to make it quite difficult,” she says.

Ms Kendall says the ideal house price would be six times the average annual income for a household.

Housing affordability is measured against household income, and in Auckland the median price for a house is nine times this. However, this would still see roughly a third of a person’s earnings spent on mortgage repayments.

Prime Minister Jacinda Ardern says, “We certainly acknowledge that the price [of six hundred thousand] is higher than even we would like,

“This is also Auckland pricing, of course for the rest of the country we are hoping to be in a more affordable range,” she said.

The Mt Albert development is a fraction of the proposed 50,000 affordable homes to be built in Auckland over 10 years as part of the government’s KiwiBuild initiative.

Housing minister Phil Twyford says the first major KiwiBuild project on Unitech land “marks the beginning of the end” for building the way out of the Auckland housing crisis.

The site for the new development is 29.3 hectares, and will feature a range of properties, including townhouses, apartments, and state housing.

The announcement at Unitech’s Te Noho Kotahitanga Marae included speeches by Auckland Mayor Phil Goff and Phil Twyford, as well as the Prime Minister.

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