Mike Hosking: KiwiBuild scheme is a house of cards

COMMENT: KiwiBuild has not had the best of weeks.

In fact, it didn't have that great a week last week. Last week we got the news that you can flip your property and keep most of the profits - that was despite the Government originally saying you couldn't.

We also got the news that KiwiBuild ballots have been extended due to lack of demand in some places. That, of course, was based on the fact that KiwiBuild isn't a home programme for those locked out of the market as the Government told us it was: it's for six-figure executives who actually have a lot of choice in the market anyway.

Then we find out this week that the $2 billion set aside to build the 100,000 homes isn't within a mile of being enough. The Ministry of Business, Innovation and Employment says it's out by about $18b.

The money set aside might build 1000 homes, not 100,000. So far you've got limited demand, prices too high and not enough start-up capital, which is why it's become a buy off the plan scheme from developers - the Government doesn't have the dough.

And that's before you get to New Plymouth, where the Minister of this increasing calamity announced his programme for Marfell.

Marfell has fallen by the wayside Phil Twyford suggested, and KiwiBuild would be part of its regeneration.

Brilliant. The price limit for Marfell would be $450,000, certainly a lot better than places like Queenstown and Auckland. But unfortunately not that attractive as it turns out given the median price for Marfell is $326,000 - so it's over $100,000 cheaper on the open market.

Well it's $326,000 if you take CoreLogic numbers. If you take council numbers it's actually $271,000 - a full $179,000 cheaper.

So not only aren't KiwiBuild homes for those locked out, they're not even competitive on the open market.

In fact, having checked as of yesterday on Trade Me, for $450k or under there are 27 listings all over New Plymouth currently for sale. Most of them very nice, all sorts of areas, houses, apartments and units.

So what is Phil actually selling? It appears nothing more than a new home. Which is not to be dismissed, as we have said before, we seem to be short of houses. Adding to the supply can't hurt.

But that's not what KiwiBuild was supposed to be about. Is the Government entering the home building market to build some houses that would have already been built really doing anything at all?

And is continuing to insist that this is some level of social assistance when it blatantly isn't, politically wise? When not a week goes by now, where facts defy the spin.

So demand is limited, money is short, the prices are too high, you keep the profits so they'll be flipped, two-thirds of potential customers are locked out, and that's before we get to original porky of promising 100,000 houses in 10 years (which is never going to happen).

The only real house here, is the house of cards called KiwiBuild.