KiwiBuild: it’s about scale

Updated: Apr 4, 2019

You’ve probably seen KiwiBuild in the news over the past few months, especially as the first buyers moved into their new homes in October. While KIwiBuild is a great way for a lucky buyer to get a house at below market value, there’s also opportunities for developers and construction companies to partner with the government to build affordable houses.

And it’s no small amount, either - the government has committed to delivering more than 100,000 new homes in 10 years.

How and why

We have a major housing shortage in our cities. As with any shortage, this low supply has created high prices. One of the consequences of these high prices has been a tendency for developers to focus new housing at the top end of the market, with large, luxurious homes rather than smaller homes more suitable for first home buyers. This makes sense, of course - if a developer can make a decent margin by building just one luxury home, there’s very little incentive for him or her to repeat work building two mid-tier homes.

This exacerbates the shortage by reducing the relative stock of smaller, more affordable homes.

KiwiBuild is an attempt to short-circuit this process by building smaller homes, selling some at market prices, selling others below market price, and using some as social housing. The overall goal is to change the mix of our housing stock by providing housing that the market isn’t providing.

Practically, this works through two different streams: land for housing, where the government buys or releases land, then develops it, and buying off the plans, where the government agrees to buy homes on land owned by developers.

What this means for residential construction

The days of the Department of Public Works are long behind us, so in order to build 100,000 homes, the government needs to partner with private sector builders. This means there’s significant opportunity for residential construction outfits who can provide the kind of homes the government wants to build.

Naturally, this comes with some challenges. KiwiBuild is a large-scale, ambitious project - construction companies are going to need to be able to deliver housing at scale, and at a some pretty sharp price points.

We’re thrilled about KiwiBuild

Delivering a large volume of houses on ambitious price points needs one thing: scale. That’s why we’re thrilled about KiwiBuild. Economies of scale have been our business model from the beginning - we routinely deliver large-scale subdivisions by using repeatable, efficient processes. This is a different skill and model than outfits who specialise in more bespoke solutions. And while bespoke solutions have their place, they’re not the solution for KiwiBuild houses.

This means that any residential construction company looking to build Kiwibuild houses should consider partnering with us to do so. We have the systems, processes and experience you need to deliver lots of houses at an affordable price. By partnering with one supplier for all your foundations, you get access to economies of scale you wouldn’t get otherwise - and by partnering with us, you get a foundation partner who not only knows how to pour a foundation, but who knows how to deliver foundations at scale.

Next steps

If you want to get involved in KiwiBuild, take a look at the opportunities for developers and builders. Then get in touch with us, and we can start working together on a compelling pitch to deliver KiwiBuild houses, on time and at scale.

© 2020 Tidy Slabs Ltd