Govt evaluating proposals for more high-priority housing

New Zealanders who live in locations with scarce housing, as well as property developers who want to build houses in those communities, will potentially be impacted by a decision about to be made by the Minister of Housing and Minister of Finance.

These two ministers are now jointly considering which Build Ready Development (BRD) projects to approve after the second round of applications closed.

BRD provides targeted support for developments that have stalled due to the changing market conditions, and which might not otherwise proceed. All developments are located in regional areas with high unmet housing needs.

Under the second round of applications, which was allocated $159 million of funding, developers were required to include affordable housing in all their proposals. The housing and finance ministers now have the opportunity to support applications in one of two different ways:

• Referring requests to sell ‘build-ready’ land to a suitable government land acquisition programme
• Agreeing to pre-purchase or underwrite homes off the plan, to unlock third-party finance and keep the development moving

What problem does BRD solve?

BRD recognises that the supply of new housing has stalled because conditions – such as rising construction costs and falling property prices – have become less attractive for developers.

At the same time, demand for off-the-plan properties has fallen, because with property prices declining and lending criteria challenging, buyers prefer to make offers on homes that are closer to completion.

Those factors have affected the delivery of new public and affordable housing.

In response, BRD makes it easier for developers to build affordable homes by underwriting their projects.

The first round of BRD applications occurred in 2022.

As a mortgage adviser, I help both homeowners and investors purchase off-the-plan properties. I can also help developers finance building projects. Contact me if you’d like to discuss buying or building a new home.