Twyford Phil: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeTwyford Phil: Oral Questions — Questions to Ministers[Sitting date: 03 December 2015. Volume:710;Page:8543. Text is incorporated into the Bound Volume.]1.PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: What policies were put in place at the Weymouth development to prevent houses being bought and sold by speculators given the $29 million Government grant for the project?Hon Dr NICK SMITH (Minister for Building and Housing): The $29 million grant was for the social housing component of this $120 million - plus mixed housing development. The contract requires that 20 percent of the 295 homes—or 59 of them—remain with registered social housing providers and that is being met. The development is being partially funded by 105 private market sales. The first 20 of these were sold off the plans and had no conditions so they could secure the bank finance for the community organisations to be able to fund the infrastructure and get on with the project. I am not surprised that some of those homes have subsequently been bought and sold at some increase in price given what has occurred to Auckland house prices over the last more than year and a half.Phil Twyford: Was the $29 million grant at Weymouth which amounts to $100000 per house on average meant to enable speculators to make $130000 in 5 weeks on the back of a Government subsidy as reported in the media today?Hon Dr NICK SMITH: The member firstly misrepresents the facts. The particular house was bought off the plans in August 2014 actually after being on the open market for about 10 weeks before it was sold. More than a year later when the house was completed that purchaser who bought it at the free-market price decided to resell it. That is no different from what has occurred in Hobsonville. It is no different from what has occurred in housing developments all over the country including many housing developments that the State funded during his time in Government.Alfred Ngaro: Have there been any changes to the Weymouth project from what was announced in October 2013?Hon Dr NICK SMITH: Yes. The original announcement was for 282 homes at Weymouth. The community developers now believe there will be in fact 295. They originally announced that the housing development would have 113 homes that would be sold openly on the market at commercial value. Actually that number has come down to 105 because they have secured such a good price on those—i.e. there are going to be 21 more houses for social and affordable purposes than when the Government announced the project.Phil Twyford: Why did the Government not include a clawback provision that would have seen capital gain from the sale of affordable homes within a certain period repaid to the taxpayer as a way of deterring speculation in these houses?Hon Dr NICK SMITH: Because the Government is not doing the development. The Government is providing a grant for the provision of 59 social houses. If the member opposite wants to regulate the price of every house that is bought and sold in New Zealand that is the sort of socialism he might stand for; it is not what we do.Phil Twyford: When he titled a press release “Weymouth symbolic of Government’s housing success” did he mean the Government’s success at having houses bought and sold by speculators subsidised by the taxpayer given that at that point there was no provision at Weymouth to stop houses being sold on in the first 3 years?Hon Dr NICK SMITH: Whether it be Hobsonville or whether it be Weymouth there will be people who buy houses off the plans and resell them. The member might want to note that some of his colleagues are on record doing just that. People’s circumstances change. What you need to realise is that this project could be funded only by some of the houses being at private market value. It is a $120 million development. The infrastructure and other components required private sales to fund it.Phil Twyford: Does he still think that his policy is a success given that only 500 houses on his account have been built in the special housing areas that very few of them are affordable and that he has no policy at all to stop them being sold off to speculators for windfall profits?Hon Dr NICK SMITH: The only way we could have a country where nobody was able to profit from houses would be to have the Government controlling the sale price of every house in New Zealand and that is not this Government’s policy. I would be very surprised if it is the member’s policy. In terms of success of the policy I would note that the latest statistics from Statistics New Zealand on the level of residential construction in Auckland out this morning show that since I have been the Minister the amount of residential housing work occurring in Auckland has more than doubled.Phil Twyford: Does not this fiasco prove that his flagship policy to increase the supply of housing in Auckland is just more piecemeal tinkering given that house prices in Auckland went up by 25 percent in the last year?Hon Dr NICK SMITH: What I would note at Weymouth is that it has been the fastest housing project that has taken place in decades in Auckland. This is a block of land that sat vacant for 9 years under Labour. I remind the member what happened to the land at Weymouth when house prices in 2004 went up by 29 percent. The land sat absolutely vacant. It has now got hundreds of houses on it.