New Zealand plans to start its KiwiBuild programme by investing $2 billion in the next three years, as part of $42 billion capital spending budget until 2022.
The programme will not only help first-time home buyers in the country but also drum up business for enterprises. Phil Twyford, Minister of Housing and Urban Development, said that KiwiBuild would largely be responsible for $5.4 billion of residential construction investment in the next four fiscal years.
Housing Investment Forecast
Twyford based his comments on the Treasury’s half-year economic and fiscal update forecast, which showed that KiwiBuild would increase investments by around 10 per cent in the June 2022 fiscal year. The government plans to achieve this by acquiring off-the-plan private projects and building new homes until 2020.
It will then spend the $2 billion capital at the same time that it will sell and reinvest in the acquired assets. Construction companies should expect to clinch several contracts under the infrastructure plan. According to as monitor.net.au, those who offer a truck-mounted lift and other construction equipment will likely see an uptick in demand for their resources, whether for rent or purchase.
New Zealand hopes that a combination of infrastructure and regulatory plans, including a ban on foreign buyers, will stabilise the residential property market. The subject of affordable housing becomes more relevant, although more Kiwis will be able to buy homes as analysts predict salaries to rise faster than home prices, according to Twyford.
Still, he acknowledged that finding skilled construction workers will be necessary to achieve this plan. The release of more land and infrastructure financing will also be key factors, aside from KiwiBuild’s target of 100,000 low-cost houses in the next ten years.
New Zealand’s plan to start a huge construction spree for affordable homes will certainly help first-time buyers and local enterprises, although have yet to see whether it will uplift investments in residential construction.