Whatever happened to KiwiBuild?

In a nutshell:

• KiwiBuild remains one of the most ambitious housing policies New Zealand has ever seen—launched in 2018 with the goal of delivering 100,000 affordable homes in just 10 years, to help address the country’s housing crisis.
• But, despite initial enthusiasm from buyers and developers, KiwiBuild struggled to ever really get off the ground.
• Between high land and construction costs, and a lack of capacity across New Zealand’s construction sector, progress towards build targets was slow—ultimately, just 2,300-odd homes were delivered before the programme was scrapped in 2024.
• Critics suggested the problem was that KiwiBuild focused on treating the symptom rather than the root cause of New Zealand’s affordable housing crisis.  
• Under the National-led coalition government, a number of reforms have been introduced to help address those underlying issues—including freeing up access to developable land and reducing build and consenting costs.

As far as housing policy goes, KiwiBuild was ambitious alright.

The goal? 100,000 high-quality, affordable homes, to be built over the course of a decade—helping to tackle New Zealand’s housing crisis and give more first home buyers a leg-up onto the property ladder.

First proposed by Labour in 2012 (and becoming one of its flagship policies in both the 2014 and 2017 elections) the programme eventually launched in 2018, attracting widespread interest from buyers and developers—while also copping its fair share of criticism.

And, as it turns out, people were right to have their doubts.

Six years (and one major policy reset) later—and with only 2,300-odd homes to show for it—KiwiBuild was dead in the water, with the National-led coalition government officially calling time on things in mid-2024.

So, just how did KiwiBuild go so wrong? Let’s take a look.

First thing’s first—how was KiwiBuild supposed to work, exactly?

The whole thing was pretty complicated (even by normal government policy standards)—but we’ll try to break it down as simply as possible.

Government partnered directly with residential developers to bring as many high quality, affordable, first home buyer friendly properties to market as cheaply as possible.

• Again, 100,000 homes was the target—1,000 to be built in the first year, 5,000 in the second, and 10,000 the year after that. Of the total, at least 50,000 were to be built in Auckland. 
• Proposed layouts included a mix of everything from studio apartments to four-bedroom homes.
• Initially, prices were capped at $650,000 in Auckland and Queenstown-Lakes, and $500,000 across the rest of the country—although these were later increased in response to growing construction costs, hoping to attract more developers to the scheme. 
• Homes were to be built either on private development land or on repurposed Kāinga Ora land.

To de-risk the situation for developers as much as possible, the government often acted as a guarantor and / or underwriter, especially for larger KiwiBuild developments.

• Having the government’s backing made it easier for developers to still secure funding for KiwiBuild projects, even if lenders’ typical pre-sale thresholds (which can be pretty high, especially for the banks) hadn’t been met.
• If any homes still hadn’t sold at completion, the Government would purchase finished stock from the developer for an agreed price, and then on-sell to eligible buyers.
• It’s worth noting too that KiwiBuild homes typically only made up a smaller proportion of larger mixed-use developments, including market-value homes and social housing.

Not just anyone could go out and buy a KiwiBuild property—first, you had to prove you were eligible.

That meant you had to get sign-off from Kāinga Ora to say that you were:

• A legitimate first-home buyer, or in the same financial position as one (such as, for example, after a divorce).
• Earning no more than $120,000 pre-tax if buying on your own; OR earning a combined household income of no more than $180,000 pre-tax if purchasing with anyone else.
  • In 2022, Government made a number of changes to income caps—introducing a new category for individual buyers with dependents (with a cap of $150,000 pre-tax), and increasing the cap for multiple buyers to $200,000 pre-tax.
• A New Zealand citizen, permanent resident, or eligible visa holder.
• Intending to live in the property for at least three years.

Homes were sold via ballot rather than on the open market.

And only once you’d gotten the stamp of approval from Kāinga Ora (i.e. to say you met the necessary criteria) could you put your name forward to buy as part of a specific KiwiBuild development—with homes always sold for a set price.

Did this grand plan at least get off to a strong start?

Despite lots of initial enthusiasm from buyers and developers, it pretty quickly became clear that KiwiBuild just wasn’t hitting the mark.

A year in, only 258 homes had been completed—more than 700 short of the programme’s target—a number of which had already been under construction when the programme launched (only later brought under the KiwiBuild banner).  

And so it was in September 2019, just over a year after KiwiBuild first swung into action, that Labour announced a massive policy reset.

The 100,000 target was ditched completely, and in its place, a $400 million progressive home ownership scheme was launched, including rent-to-buy and shared equity options.

Developers were also given permission to sell leftover KiwiBuild stock on the open market.

So, back to our original question…why and how did KiwiBuild go so wrong?

Building in all the wrong places

In the early days, with this insane (albeit self-imposed) target hanging over its head, government fell into the trap of trying to pump out as many houses as possible, without much thought as to what and where they were building.

The net result? A bunch of KiwiBuild homes in places where there just wasn't a lot of first-home buyer demand, either because of the location itself or lack of infrastructure, leaving them struggling to shift completed stock.

Prices that didn’t really work for anyone

Despite being billed as ‘affordable’ homes—which they were, relatively speaking—KiwiBuild prices were still out of reach for a lot of New Zealanders.

Assuming a 10% deposit, buyers still needed to be earning significantly more than the average household income at the time (~$105,000) to comfortably service the mortgage on a $650,000 KiwiBuild home in Auckland or Queenstown.  

The programme was criticised for effectively subsidising homes for people who could already afford them, rather than supporting those who needed it most.

From a developer perspective, too, there were problems.

The economics of delivering KiwiBuild homes were tight to begin with. Throw in a period of insane build cost inflation—up 41% from 2019 to 2024—and high land prices (especially in Auckland and Queenstown) and building homes within the price caps was a virtually impossible task.

It made getting developers on board a tough sell, and meant progress toward build targets was painfully slow.

Government ultimately increased KiwiBuild house price caps in 2022, and then again in 2023, in a last-ditch attempt to attract more developers to the scheme, but all that did was price more target buyers out of the market.

A lack of capacity in the construction sector

Coming out with all these big, bold targets was one thing; delivering on them was something else entirely. You can’t just will 100,000 homes into existence.

The problem was that the world had changed significantly in the six years between when the idea for KiwiBuild was first conceived and when it finally got off the ground.

In 2012, New Zealand’s construction sector was still getting its mojo back in the wake of the GFC. Consent numbers were down, construction activity was slow, and there was plenty of spare capacity to start ramping up output.

By 2018, though, strong immigration had seen demand for housing go through the roof (excuse the pun)—and even though the construction sector had kicked things up several notches in response, a shortage of skilled labour meant it was operating almost at full capacity.

Ultimately, all KiwiBuild did was cannibalise resources from developments already underway or in the pipeline—and instead of adding to housing supply, output stayed roughly as it would have been without government intervention.

In short, experts argued that KiwiBuild was out to treat the symptom rather than the root cause(s) of the problem

The issue wasn’t that the construction sector didn’t *want* to be churning out more affordable homes, it was that the system in which it operated made that pretty much impossible to do—thanks to things like:

1. Outdated council zoning laws which seriously limited access to developable land—especially in high-demand areas like Auckland—pushing land prices through the roof.
2. Bureaucratic red tape that made the planning and consent process unnecessarily costly and time consuming.
3. Inefficient investment in the delivery of new / upgraded infrastructure to support all those additional homes.
4. A build sector already operating at near capacity; and struggling with build material cost inflation and a shortage of skilled labour.

Without first taking steps to address these wider issues, KiwiBuild was basically a losing game from the get-go.

So, if KiwiBuild wasn’t the answer, what is?

Since taking office in 2023, the National-led coalition has proven itself to be (to quote our very own JB) a government hell-bent on keeping the cost of housing down by almost any means necessary.  

It’s introduced a number of measures to try and tackle some of those big underlying issues which KiwiBuild largely skimmed over.

Changes to the Resource Management Act (RMA)

In late 2025, government announced an extensive series of proposed changes to the RMA—intended to free up land supply, speed up the consenting process, and remove other barriers to affordable housing—including: 

• Transitioning to a more centralised (and far simpler) planning system, combining more than 100 different district plans into just 17 throughout the country—allowing developers to more easily replicate projects / designs across different regions.
• Mandating land supply—effectively requiring councils to ensure there is enough appropriately zoned and serviced land to cater for population growth (and increased housing demand) over the next 30 years.
• Changes to zoning laws to allow for greater intensification in urban areas, especially in Auckland.
• Plans to establish a dedicated Planning Tribunal, allowing disputes to be resolved more efficiently and effectively. 
• Raising the threshold for the sorts of construction projects that actually require council consent—including exemptions on granny flats of less than 70m².

Introducing the Building Product Specifications pathway

Launched in mid-2025, the Building Product Specification pathway makes it easier for builders to use construction materials manufactured overseas—so long as they meet the NZ Building Code—helping to bring build costs down by increasing competition, and reducing bottlenecks caused by over-reliance on locally-manufactured products.  

As the saying goes, big problems need big solutions.

If KiwiBuild taught us anything, it’s that addressing New Zealand's housing crisis wasn't as simple as just setting some big, hairy, audacious build targets and hoping the market could deliver.

Real change meant needing to tackle deeper structural issues—from planning rules and infrastructure to labour shortages and construction costs.

Whether the latest reforms succeed where KiwiBuild fell short remains to be seen.