LISTEN: A significant build-to-rent housing scheme involving a developer and KiwiSaver provider has been announced today.
Homebuilder NZ Living, owned by Shane and Anna Brearley, and default KiwiSaver provider Simplicity have established a new business to build 10,000 new rental homes in Auckland, Tauranga and Wellington in the next decade, worth about $5b.
It could make a huge difference to a lot of people wanting to buy their first home.
The new Simplicity Living business will be wholly owned by Simplicity,
Simplicity managing director Sam Stubbs says funding for the housing developments would come from a percentage of the company's $3.9b of funds under management.
"We take a very small percentage of that - two or three percent - and we effectively buy the land and develop the property and then rent it out," he told Magic Talk.
"We control every phase of the operation."
All homes are to be apartments or terraced one to two-bedroom places to cater to the highest demand.
Simplicity Living will own the properties for 100 years and will be built to last.
"When you think about owning something for a hundred years, that means you build it to last 100 years," Stubbs said. The homes will be built to twice the building code, which currently says you should build a home to last at least 50 years.
Long-lasting materials such as concrete, brick and steel will be used in the building process and the apartments will be bigger than average.
"If you're going to live in this for a very long time, particularly elderly couples or families, there's nothing like space. You need to be able to build," Stubbs told Magic Talk.
The apartments will all have balconies.
Stubbs says this initiative takes a long-term view of the property market.
"So much of the property market is about short-term returns, particularly from a developer's perspective. They build to the minimum code, they get the maximum amount of borrowing and they sell it at the biggest price they can," he said.
"The poor old consumer at the end has to pay a fortune for a building that is only just good enough."
Listen to the full interview with Sam Stubbs above.
Magic Talk | Afternoons with Danny Watson, weekdays from 12pm