Mike Hosking: KiwiBuild has gone off the rails

Mike Hosking,
Publish Date
Monday, 29 October 2018, 10:54AM
Minister Phil Twyford and new Kiwi Build home owners Derryn Jayne and Fletcher Ross stand with PM Jacinda Ardern outside their Papakura Home. Photo / Greg Bowker.
With the criticism comes the irony. The government handed over the keys to their first Kiwibuild house over the weekend. 
The couple who got drawn out of the ballot looked like a very nice, middle-class sort of family, who were very grateful for their luck and opportunity. 
They paid $650,000. Dave Dobbyn sang - I hope the taxpayer didn’t fork out for that. 
There was general festivity and merriment as the government used, as governments have a want to do, the occasion to grab the headlines. 
Policy is not just about specific delivery, it's about sales, pitches and image. And this was a good one.  
Except, there was no shortage of critics lined up. And in that is the irony, and sadly, the government's biggest mistake. 
The critics were the likes of the Sallies who quite rightly point out as we have done all year, these aren't homes for the people the Labour Party promised, these aren't homes for the battlers, strugglers, and the ones left on the scrapheap of the economic boom times. 
These homes for high earning middle-classers, and the trouble with that is what Labour promised, and told us, they would do, and what they're actually doing are two different things. 
We have been long suspicious given the price for a home is not just $650,000, but actually started out at $600,000 so it's gone up $50,000. And our suspicions were confirmed when Treasury produced the figures that showed very,very few people actually had the money to afford one of these homes. 
Even at a 10 percent, you need $65,000,  and therefore a mortgage at over almost $600,000. Even at five percent, do the numbers and it’s a salary well into the six figures required to foot the bill. 
And as the Sallies quite rightly point out, just how many of their clientele, or Labour Party supporters have that sort of income. Well, the answer is less than a third. And the reality is at $650,000 there are in fact plenty of homes in the market for sale already at that price. 
So, in essence, the government were providing nothing close to what they promised. Yes, they've boosted supply and that is no bad thing. But they’ve done nothing that GJ Gardener haven't been doing. 
But the difference is they pedalled the myth that it’s the hard done by that will somehow magically get their housing issues solved by a Labour government, when in fact nothing of the sort has happened. 
If this was deliberate, in other words, if Phil Twyford and co knew all along this was the outcome it was a political con. If it's an unfortunate set of circumstances, then it's ineptitude.
Either way, Kiwibuild is not the answer to the so-called housing crisis. In fact, as further numbers last week showed it isn't even closing the demand gap. This government faces the next election with a bigger gap than they already have. 
If you can afford $650,000, brilliant. But when the Sallies are bagging a Labour government, something's gone off the rails.      
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