KiwiBuild problems building up more than houses

NZ Herald: KiwiBuild chief gone after just five months: Barclay leaves top role

KiwiBuild chief executive Stephen Barclay has left the organisation after only five months in the job.

Barclay was appointed in May to steer the Government’s flagship scheme to build 100,000 homes in a decade.

Barclay, who has business, civil service and sporting experience, could not be reached for comment.

However, according to a person close to the matter, Barclay left his position at the start of November.

Leaving after just five months is not a good sign.

Leaving a month ago and only being made known publicly now is a sign that the government knows it doesn’t look good for KiwiBuild.

This is just part of ongoing not looking good. Reported  Wednesday (TVNZ): Five Auckland KiwiBuild apartments fail to sell on ballot, offered up on a first come, first served basis to those who qualify

Another five KiwiBuild properties have failed to sell off the ballot and are now being offered to anyone willing to buy them that qualifies for the programme, on a first come first serve, basis.

The properties are in Auckland’s 340 Onehunga Mall development and consist of two studios and three one bedroom apartments priced from $380k to $500k.

A total of 25 apartments were originally available, and 20 have now sold.

However, after the winner and runners-up fell through on five apartments they are now back on the market.

A spokesperson for KiwiBuild apologised to the people in the original ballot who weren’t contacted first when the apartments came back on the market.

“It’s a learning process,” he told 1 NEWS.

The spokesperson further clarified KiwiBuild’s position, saying there are no expectations that KiwiBuild homes would sell off the ballot.

Yesterday (Stuff):  KiwiBuild problems ‘more than just teething issues’

The extent of the issues that KiwiBuild has encountered have been a surprise, one economist says.

After three KiwiBuild homes were left unsold through the ballot for the Wanaka development, it was revealed that five apartments were passed up by the selected buyers for the 340 Onehunga Mall Development. They were then handed to a real estate agency to sell privately on a first-come, first-served basis (although still to qualified KiwiBuild buyers).

The scheme has also been criticised for building properties in New Plymouth that are selling for more than the median price in the suburband for including a graduate doctor among its first buyers in South Auckland.

Cameron Bagrie, of Bagrie Economists, said the problems seemed to be more than just “of the teething variety”.

“It’s a big project, there are going to be issues. I guess what’s been a bit of a surprise is the extent of the issues.”

Stephen Barclay leaving last month adds a bit of a shock to the extent of the issues – but are they a surprise? It was always going to be difficult for Labour and Phil Twyford to deliver on their highly optimistic plans, especially in the first few years.

It was fairly obvious they weren’t going to be able to just wave a wand and suddenly have heaps of land available, and heaps of builders available.

Newsroom:  Behind the contentious KiwiBuild numbers

The promise is well-known: 100,000 over 10 years, but the reality could be quite different. So far, just 33 have been completed, with 77 more on the way and a pipeline for many thousands more slated to begin construction in the large urban development projects announced in Auckland and Wellington.

Both the optimistic and pessimistic forecasts have their risks.

De-risking residential construction could come with massive gains in productivity, increasing existing capacity, or there could be a financial shock in the next four years. A shock would cause overstretched construction firms to collapse, leading to a huge slowdown in construction; with the forecast being slashed by 50 percent between the election and Budget, it’s difficult to tell.

Twyford’s next moments of truth will come at the Half-Year Economic and Fiscal Update next week, and then the next Budget, when Treasury releases its latest forecasts.

Any project of this size is going to have high risks.

Leave a comment

36 Comments

  1. Gezza

     /  December 8, 2018

    Bring me a new Housing Minister. This one’s wonky.

    Reply
    • Twyford seems to be out of his depth. But how could step up to replace him?

      Julie Anne Genter may be capable of taking on Transport – she has sufficient credentials, but her ideology may worry some.

      Jenny Salesa is Associate Minister of Housing and Urban Development, but I’m not sure she would be capable of sorting out KiwiBuild or housing.

      Reply
      • Gezza

         /  December 8, 2018

        Twyford would be out of his depth in a finger painting class. I dunno. There’s not many that impress. If desperate I’d give it to Robertson.

        Reply
        • Kitty Catkin

           /  December 8, 2018

          I looked houses up in the Herald and there are plenty of apartments at that price or less. I was very taken with one that was $290,000 and as it was furnished, the photos gave a good idea of the size. It was well designed to not waste any space.

          Reply
  2. Blazer

     /  December 8, 2018

    Kiwi build is an impossible mission,given the ludicrous costs involved.

    The foreign buyers ban,interest /tax readjustment and 5 yr brightline test need to be backed up by empty houses/unutilised land levies,.

    Prices are softening gradually.

    Reply
    • Alan Wilkinson

       /  December 8, 2018

      Your solutions merely add to the harm caused to individuals by oppressive government.

      Reply
      • Blazer

         /  December 8, 2018

        Your fantasy free market does not,has not and can never …exist.

        Reply
        • Gezza

           /  December 8, 2018

          Phil’s not up to this job Blazer. It’s a critical portfolio. Who do you think could at least manage to front it better and have some cred with the industry?

          Reply
          • Gezza

             /  December 8, 2018

            Over 2 hours to come up with an answer. Nothing. Says it all really.

            Reply
          • Blazer

             /  December 8, 2018

            perhaps you could suggest another politician from any stripe that could do a better job!
            No one puts their hand up for the …’poison chalice’.

            Reply
        • Alan Wilkinson

           /  December 8, 2018

          Your obsession is as irrelevant as ever, B.

          Reply
        • PartisanZ

           /  December 8, 2018

          Forestry is proving the perfect example of an ‘industry’ best overseen by central government and not left to ‘market forces’ …

          And housing is so much more than just an ‘industry’ …

          Reply
    • Gezza

       /  December 8, 2018

      @ Blazer

      Best I can do at short notice. Top left and top middle might manage to salvage something out of it and get away with at least making more progress than National ever bloody did.

      Others are there to either give them something useful to do or keep them out of mischief until the next election.

      Reply
  3. Alan Wilkinson

     /  December 8, 2018

    Ignoring the real problems just result in wasting money as predicted.

    Reply
  4. David

     /  December 8, 2018

    Kiwibuild was always an ambitious idea but I have been surprised at the rapidity of its demise, Twyford unfortunately doesnt have the drive and skillset to get things done.
    Its emblematic of this cabinet and a PM who,s focus is really elsewhere.

    Reply
    • Blazer

       /  December 8, 2018

      the National alternative….look the other way,kick the can down the road…let someone else worry about….it later.

      Reply
      • Gerrit

         /  December 8, 2018

        Squirrel time already Blazer?

        The question is not what National would not do or should have done.

        Labour is in charge, what are they doing? Running around like headless chooks!

        Twyford changing the rules on the run and Ardern first learns about it from the media.

        –“Newshub can reveal he didn’t even run that past the Prime Minister, and understands she only found out about it while watching our TV story.”–

        https://www.newshub.co.nz/home/politics/2018/12/exclusive-pm-jacinda-ardern-to-review-housing-minister-s-kiwibuild-house-flipping-penalty.html

        Reply
      • PartisanZ

         /  December 8, 2018

        Blazer … I do believe you left something out …

        National’s alternative also includes “never mind the suffering along the market way” …

        The problem as I see it is that Twyford, or any government for that matter, are painted so far into a corner by our economic dependency on ‘property speculation’, with its neoliberal corollaries of ‘globalization-migration’ [FIIRE], that they simply can’t come out and fight …

        Perhaps new gloves are required? Or perhaps the head injury rate of orthodox fighting will reveal a public distaste that can be capitalized on?

        Reply
  5. Trevors_Elbow

     /  December 8, 2018

    Land supply. Plain and simple. Solve the land price issue…. but know one wants to because if they do a number of VOTING middle class kiwi couples are going to see their property values shaved significantly.

    Blazer is partially correct: Kicking the can down the road has created a significant and potentially very dangerous situation. The time to act was during the Clark Governmnet – she didn’t, the Key government had an opportunity in its first term to act – he didn’t and then second term the numbers weren’t there for RMA reform which in my view is pivotal to resolving the issue…. and the Adern Government cant act except on a stage….

    Constrain migration, reform the RMA to free up land for housing and then some of the other measures around infill/re-configuring may have a chance… otherwise you’re throwing pails of water on a 3 story building well alight…

    Reply
    • Alan Wilkinson

       /  December 8, 2018

      Yes, plus the building Act and the disaster of making Councils responsible for quality and durability. The system is completely stuffed and the incentives comprehensively buggered.

      Reply
    • Blazer

       /  December 8, 2018

      your first paragraph says it…all.

      Reply
  6. Gerrit

     /  December 8, 2018

    He did not last long. 5 Months. Left in November and only just now (6 weeks later) made public and reported on? Dodgy Twyford again?

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12173087

    –” KiwiBuild chief executive Stephen Barclay has left the organisation after only five months in the job.

    Barclay was appointed in May to steer the Government’s flagship scheme to build 100,000 homes in a decade.

    Barclay, who has business, civil service and sporting experience, could not be reached for comment.

    However, according to a person close to the matter, Barclay left his position at the start of November.”–

    Reply
  7. Zedd

     /  December 8, 2018

    obviously the Tories need to be reminded that these are ‘aspiration targets’ IF they only build 99,000 is that just proof they have failed OR is it 99,000 more kiwi families with houses to live in !

    pull your f@cking head out !!

    Reply
    • Gezza

       /  December 8, 2018

      They need to move from aspiration to perspiration & get cranked up somehow, Zedd.
      If they don’t they’ve given the Opposition a big cudgel to hammer them with. This is a key policy. It’s incredible that after being their housing spokesperson for years when they give Phil the portfolio the clueless git didn’t have a bloody clue what to do.

      Reply
    • Pink David

       /  December 8, 2018

      Good to know it was just an ‘aspiration’.

      Does that mean 1 house is them achieving success,or is it 6?

      Reply
    • Trevors_elbow

       /  December 8, 2018

      Clown… aspirational … what.a.cop
      Out.

      Reply
    • PDB

       /  December 8, 2018

      You’re making shit up again Zedd – it was a major election promise by Labour, not an aspiration.

      Labour.org: “Labour’s KiwiBuild programme will build 100,000 high quality, affordable homes over 10 years, with 50% of them in Auckland. Standalone houses in Auckland will cost $500,000 to $600,000, with apartments and townhouses under $500,000. Outside Auckland, houses will range from $300,000 to $500,000.”.

      Reply
  1. Q+A: Phil Twyford “not my job to know” why KiwiBuild CEO has left job | Your NZ

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