2. Question No. 2—Housing and Urban DevelopmentHon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban DevelopmentOral questions resumed.ORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 2—Housing and Urban Development2. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: How is he ensuring there is actual demand for the place and type of houses he is contracting for KiwiBuild?Hon PHIL TWYFORD (Minister of Housing and Urban Development): The ministry advised me that they take 10 key steps to assess the level of demand for affordable housing and the locations in which it builds KiwiBuild homes: analysing the number of registrants on the KiwiBuild register in the relevant location and the typologies for which they've registered; analysing census data to assess the number of households with incomes sufficient to service a mortgage at KiwiBuild price points; analysing Ministry of Business Innovation and Employment data regarding the number of renting households in the area and the dollar value of the bonds lodged to assess how many households in the area can afford to service a KiwiBuild mortgage; analysing recent sales data in the area to assess the volume value and type of sales; assessing how many properties are for sale in the area and the average time taken for them to sell; talking to market participants such as valuers and real estate agents; contracting experts to provide opinions on these factors; obtaining a registered valuation; determining how many other KiwiBuild developments are going on in the area; and analysing local government plans and urban development strategies or targeted urban growth areas.It's important to note that the housing and urban development ministry is trying to predict demand for something which doesn't exist in the current market: affordable housing. And in some cases the proposals are in new subdivisions where historic data is either non-existent or not directly relevant.Hon Judith Collins: Has his demand modelling considered specific demand for two-bedroom houses in places such as Huapai north-west of Auckland?Hon PHIL TWYFORD: Yes.Hon Judith Collins: If a demand model said a house would be sold but it was offered to the market and not sold would he believe the demand model or would he believe the market?Hon PHIL TWYFORD: Well that's a hypothetical particularly in the case of Huapai.Hon Judith Collins: How do taxpayers benefit from underwriting houses in Huapai based on demand that has been modelled?Hon PHIL TWYFORD: Well taxpayers benefit and first-home buyers benefit when the organisation that the KiwiBuild unit contracts in Huapai with one of the country's leading residential builders Mike Greer Homes to build affordable homes at a price and a quantity that otherwise would not have happened as Mike Greer himself has said in the media. [Interruption] SPEAKER: The member's got to call if he wants to—Kieran McAnulty: I did.SPEAKER: Oh well not very loud and he sat down afterwards as the Minister of Finance—Kieran McAnulty: Supplementary Mr Speaker. What work has the ministry undertaken to work out expected demand in each region?Hon PHIL TWYFORD: Well as part of the establishment of KiwiBuild officials provided an analysis of housing demand in key locations and this reflects the difference between population growth adjusted for household size and the number of building consents issued between 2006 and 2017. That analysis showed that Auckland during that period developed a shortfall of over 44000 homes; Wellington 9000 homes; Hamilton nearly 6000 homes; Napier-Hastings nearly 1800; and Queenstown Lakes was 1600 homes short.Hon Judith Collins: How does the KiwiBuild underwrite increase supply when photos show the houses in Huapai were already clad and roofed in September 2018 two months before he signed the underwrite?Hon PHIL TWYFORD: Because as Mike Greer himself explained in the media he'd been negotiating with the KiwiBuild unit for several months while he put that development together and as he said the KiwiBuild underwrite allowed him to build a larger development with more affordable homes. It reduced his financing costs enabled him to reduce his margin and build more affordable homes and that's why the KiwiBuild homes are at a lower price than the other homes in that development.Rt Hon Winston Peters: Dealing with the issue of supply-side economics raised by the Hon Judith Collins is it not a fact that last year the Government and the people of this country built more houses than any year since 1978?Hon PHIL TWYFORD: Well it's true that the Government is building currently more homes than has ever been the case since 1978. And the consent numbers—the private sector consenting numbers a partial indicator of success—demonstrate that we have the highest build rate now since 2004.Hon Judith Collins: Did he inform the Minister of Finance that the Huapai properties were already clad and roofed two months before he asked the Minister of Finance to sign the approval to underwrite?Hon PHIL TWYFORD: You'll have to ask the Minister of Finance. But as the member says he signed off the documents.SPEAKER: No. That answer is not good enough—did he tell the Minister of Finance? Saying you've got to ask the Minister of Finance—he might have responsibility for what he hears but the Minister has a responsibility for what he said.Hon PHIL TWYFORD: No. I did not tell the Minister of Finance because he's aware he signed off all of the documents on that project.Hon Judith Collins: Well if the Minister says that the Minister of Finance was aware when he signed off the documents but he didn't tell him how does he believe that the Minister of Finance was aware?Hon PHIL TWYFORD: Mr Speaker I think I've answered that question.SPEAKER: No. I think if the member has answered it's passed some of us by so answer it again.Hon PHIL TWYFORD: So as I pointed out to the member earlier I did not directly inform the Minister of Finance but the Minister of Finance is familiar with that project because he signed off all the documents relating to it.Hon Judith Collins: How many other times has he approved underwrites for houses to be built when they have been already built?Hon PHIL TWYFORD: I can't give a direct number on that but the member needs to understand that we are in the business of getting affordable homes built something that that Government never did for nine years. I point her again to the comments of Mike Greer who said that he was able to because of KiwiBuild support build more homes at a more affordable price than he would otherwise have been able to do.