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Labour would be able to offer first home buyers two-bedroom properties in Auckland for as little as $360,000 if elected, party leader David Cunliffe announced today.
Labour's KiwiBuild policy would build 100,000 new, affordable homes over 10 years and sell them at cost to first home buyers, Mr Cunliffe said.
"Using the purchasing power of the Government and off-site building techniques we will be able to lower the cost of building a home.
"This will enable Labour to sell a new two-bedroom terraced KiwiBuild home for around $360,000 in some parts of Auckland.
"That compares to around $485,000 for a similar Hobsonville home."
The policy would result in a couple earning $75,000 being $200 a week better off than under National's housing policy, Mr Cunliffe said.
"A $200 a week difference in mortgage repayments is huge. It is the difference between realising the dream of home ownership and facing years of renting.
"Labour's policy will help 50,000 families over five years buy a first home. National's will only give a slightly higher deposit to 40,000 families," Mr Cunliffe said.
Labour would also tackle property speculation from non-residents by amending the Overseas Investment Act to close a loophole which made New Zealand an easy target for overseas speculators, Mr Cunliffe said.
New restrictions would be also applied on the purchase of residential property by non-residents so that they would only be granted permission to purchase a residential property if they intended to live here permanently or if the purchase added to the country's existing housing stock by buying a new home, he said.
Labour's housing spokesman Phil Twyford said KiwiBuild would deliver the equivalent of a Hobsonville $485,000 two-bedroom terrace home for $360,000 by forgoing the developer's margin on the land cost – saving $36,000 and a further $89,000 would be saved by using off-site manufacturing, bulk buying building materials and reducing builders' margin through high-volume tendering.
The process would drop the build cost from $3389 per square metre to $2400, Mr Twyford said.
"When you're building at scale - when you're building 10,000 houses a year, you can do deals that drive down the cost of building materials.
"Currently, Kiwis pay 30 per cent more than Australians do for the same building materials so we know that we can really push down the cost of building materials.
"Also, in some cases with KiwiBuild the Government will be the developer, that's how we'll get better control over land costs and for the units we're talking about today, we think we can knock 20 per cent off the cost of the land."
"The other way we can really drive the cost down is through off-site manufacturing and by the scale of KiwiBuild we can tender that work out to companies that can really crank up their capacity, build factories [and] make better quality houses at a much more cost-effective price.
"There are several companies in New Zealand who are already doing this who are itching to crank up capacity.
"The Germans do it, the Scandinavians do it, the Americans do it, it's actually time that we did it."
- By Brendan Manning of APNZ