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An Auckland developer is building new houses for $299,000, aiming to draw first-home owners.
Mark Hackshaw said his NAD Trust was selling three-bedroom homes at Tuakau to first-home buyers who qualified for the Government's shared-equity housing scheme.
The Real Estate Institute's latest figures show Auckland's median at $421,000.
Barfoot & Thompson's average Auckland sales price is $497,000.
Mr Hackshaw said he was able to build the places at almost half the average or median Auckland prices by building cost-effective houses on small sections.
Construction of the first two houses in a new subdivision started three weeks ago. G.J. Gardiner was the builder and Harcourts Pukekohe the marketer.
"They are the first two show homes of 22 places in Gibson Rd.
"But the trust has got another 55 sites available in Tuakau and Pukekohe. I'm building brick and tile duplexes with double garages," he said.
The $299,000 includes all landscaping, internal painting and carpet, letterboxes, driveways, fences and an oven.
The houses are 130sq m each and come with a five-year guarantee by either Milestone Homes or G.J. Gardiner Homes and a 60-day maintenance warranty.
If buyers qualify for the Government loan through Housing New Zealand, they could get 30 per cent of the house paid for, equating to about $90,000, Mr Hackshaw said.
Kiwibank interest rates mean buyers could be paying as little as $325 a week for an interest-only loan.
That was less than current market rentals for similar properties.
Buyers need to pay $15,000 as an initial deposit and the remaining money is due after the house is built, which takes about three months.
To qualify for the Government's shared equity scheme, first-home buyers must be New Zealand residents with a good credit history and a household income of $55,000 to $85,000 annually before tax.
Mr Hackshaw said he had bought 550sq m and 700sq m sites and had cut them in half, giving him enough land for a pair of houses, joined at the garages.
He has already built about 35 houses, some for the Merlot property business which has folded in the past few months.
He started developing places in the Waitakere area, then moved to South Auckland. He is yet to sell any houses under the shared-equity scheme but said the first two were due to be finished by the end of next month.
Housing NZ says shared equity loans are for people who want to buy or build their first home but cannot because houses in their area cost more than they can afford to borrow.
Such a loan reduces the amount to be borrowed by providing an interest-free top-up loan that doesn't need regular repayments.