NZ to Hasten Construction of 60,000 Houses via $1B Fund

The New Zealand government plans to use resources from a $1 billion Housing Infrastructure Fund to build 60,000 houses in five rapidly growing councils.

Prime Minister Bill English said that the infrastructure projects funded through the programme will help in advancing the construction target within a 10-year period, amid an increase in population in the five councils.

Five Councils

Construction of bollards in Auckland from All Steel Security, development of land in Hamilton and earthmoving activity may comprise some of the nine projects in the target councils. Other areas include Waikato, Tauranga and Queenstown.

In terms of funding, the Auckland Council received the biggest amount of intended spending at $300 million for 10,500 houses. By contrast, Tauranga will account for the biggest homebuilding activity, as there are 35,000 homes slated for construction in the city. Housing Minister Nick Smith said that the councils and New Zealand government will soon complete detailed funding agreements for the projects.

The plan represents a win for the public and housing sector, yet some issues should be resolved such as the extended time from acquiring building approval to the start of construction.

Lag Time

Statistics NZ figures suggested that an estimated 97 per cent of building consents result to finished homes, yet it currently takes around 10 months for construction to begin following approval. In the year ended March, builders completed around 28,000 houses compared to 31,000 properties in the same month of 2016.

The figures indicated that the delay could be hindering efforts to increase the supply of new homes. Labour Housing spokesman Phil Twyford agreed, saying that the government should address the concern to avoid any potential problem in meeting an expected surge in housing demand.

Conclusion

The government funding will help in resolving the looming housing crisis brought by a growing population. Still, there should be a more consistent strategy to ensure that construction starts as soon as possible after gaining building consents.

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