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Budget 2020: Social housing boost

Rebuilding New Zealand post-Covid-19 was, as promised, the focus of Budget 2020 - and it turns out that includes the roll-out of a big social housing building programme.

Thursday, May 14th 2020, 3:56PM 1 Comment

by Miriam Bell

Finance Minister Grant Robertson

Finance Minister Grant Robertson delivered the Government’s much-anticipated Covid-19 recovery Budget this afternoon.

While economic and business support, including job creation, dominated the announcements and initiatives, infrastructure development featured strongly too.

In line with that, the Government plans to deliver an extra 8,000 new public and transitional homes through Budget 2020 funding.

The extra 8,000 homes announced will be made up of  6,000 public housing homes and 2,000 transitional homes.

This will be financed by $5 billion of building through the Kāinga Ora borrowing programme, along with investment in Community and Transitional Housing providers.

Additionally, Budget 2020 allots $570 million in Income Related Rent Subsidy funding to tenants.

Robertson says this will improve affordability by increasing the supply of houses and also provide a shot in the arm to the residential construction sector as New Zealand emerges from the Covid-19 crisis.

Budget 2020’s housing funding was also highlighted as a move that will stimulate the residential construction sector, create jobs and reduce the housing shortage by Housing Minister Megan Woods.

It takes the number of public and transitional houses funded by this Government to approximately 17,000 and represents the largest public housing building programme in recent decades, she says.

“This multi-year investment sends a strong signal to the construction sector so it can plan with certainty to secure investment, retain staff and further enhance the skills of its workforce. The economic impact of more than $5 billion of construction activity will be significant.”

As well as helping to rebuild the economy, building, and providing more warm, dry and secure housing will go a long way to creating a better, fairer society for all New Zealanders, Woods adds.

It’s worth noting that, in his Budget speech, Robertson also said further support for housing development and construction, including in the private residential market, will be a critical element of the recovery from Covid-19.

It is planned that this will be the subject of further investment in the next phase of the newly announced $50 billion Covid-19 Response and Recovery Fund.

Budget 2020 allotted $15.9bn of this fund to an extension of the wage subsidy scheme to the hardest hit businesses, free trades training, and the public home building programme.

Nearly $14 billion has gone to previously announced initiatives and that leaves about $20 billion unspent, pending further investment announcements.

The other major housing-related announcement in Budget 2020 was a $56 million boost to the Government’s Warmer Kiwi Homes insulation and heating programme.

However, a spokesperson for Woods has confirmed that this programme is aimed at low-income homeowners and does not include residential landlords.

Tags: Budget building construction housing market housing shortage real estate rental market rents tenants

« There’s life in the market yet How Budget 2020 supports the housing market »

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Comments from our readers

On 18 May 2020 at 11:13 am two cents said:
This is all fantastic news. We now await delivery. For example, when do banks ease their LVR guidelines, Mr. Minister?

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

Last updated: 28 May 2024 11:21am

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