14 Jun 2015

Company struggles to understand cost increases

5:21 pm on 14 June 2015

The Housing New Zealand subsidiary developing homes at Hobsonville Point in Auckland is struggling to understand why costs for building materials have been rising.

Hobsonville development

Photo: RNZ/ Kim Baker Wilson

Some housing at the development will now be completed two years earlier than planned, and almost one-third will be classed as affordable.

But the new top price for affordable homes at Hobsonville Point is rising from $485,000, to $550,000.

Hobsonville Land Company chief executive Chris Aiken said that was because of rising costs for things such as steel, timber and energy.

"It's quite hard for me to understand cost increases when globally they've been at their lowest levels and in other countries they've been reducing their costs for those. I don't understand why we're not getting those big material increases coming through."

The Hobsonville development.

The Hobsonville development. Photo: RNZ/ Kim Baker Wilson

Mr Aiken said he could not guarantee the top price for affordable homes would not rise again.

'Too little, too late'

Labour's housing spokesperson Phil Twyford said the speeding up of building 1000 homes in Auckland is too little, too late.

He said although while the increased pace was welcome, it was still not enough to fix Auckland's housing crisis.

He said there was a housing shortfall in Auckland of 20,000 to 30,000 homes.

"Bringing forward a few extra houses in Hobsonville faster that we'd otherwise planned is a good thing, but it's a long way short of the scale of what's needed to fix the Auckland housing crisis.

"And what's needed is a massive, Government-backed housing programme."

Mr Twyford said although the house prices at Hobsonville Point were significantly below the average Auckland house price, it was still completely unaffordable for most young families.

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