Buyers caught up in delayed KiwiBuild development wish they'd never heard of the scheme

Benedict Collins
Source: 1News

First home buyers caught up in a repeatedly delayed development in Wellington say they wish they'd never even heard of KiwiBuild and the Government is advising them to try to get their money back from the developer.

Situated a stone's throw from the central city and Basin Reserve, the Monark development will feature 93 1 and 2-bedroom new apartments.

Forty-four of those apartments will be KiwiBuild homes.

But the project has been repeatedly delayed - it was originally due to be completed in July this year.

Firstly that was extended until December this year.

Then the Wellington Company which is in charge of the development delayed it again until October 2021.

This week, the Wellington Company cited Covid-19 in another delay in an email.

"Thank you for your patience as we worked our way through the (quite major) challenges that Covid-19 created in the construction industry - with both supply chains, and resourcing," the email said.

"We are happy to advise that demolition will start next week (on May 25) and carry through into June 2020.

"Based on our contractor’s latest programme update, the delays we have faced means that completion of Monark is now planned for June 2022."

One KiwiBuild buyer, who wished to remain anonymous, told 1 NEWS he was delighted when he first won a ballot for a KiwiBuild home in the complex.

"I was thrilled to be honest, I had almost given up on the idea of owning my own home. This seemed like a really good way to get started, to get on the ladder."

But the repeated delays have left him and his partner now paying rent for two more years in a poor quality rental property - despite having paid their deposit.

They're now wishing they'd never heard of KiwiBuild.

"I would have to say my wife and I are quite gutted with the way things have gone."

National's housing spokesperson Nicola Willis says it's totally unacceptable for people investing in a government housing programme to be treated this way.

"They put their faith in the KiwiBuild brand, they paid their money and now they've been left high and dry."

The new June 2022 construction target is just one month before the sunset clause comes into effect in July 2022 - where the developer or buyers can terminate the contract, raising fears the KiwiBuild buyers could be without a home three years after paying their deposit.

"It will poison anyone's desire to go anywhere near a KiwiBuild home in the future and the government must fix it," Ms Willis said.

Housing Minister Megan Woods concedes it's very disappointing.

"It is very unfortunate for those first home buyers who are caught up in this," she told 1 NEWS.

Ms Woods says it wouldn’t happen again after changes were made to KiwiBuild.

"This is one of the first of the apartments that KiwiBuild entered into an agreement around – it dates back to 2018. It certainly isn’t a way in which we would do a KiwiBuild development now, so we certainly wouldn’t be selling off the plans before construction had started.

"We changed that in December last year when this development was first brought to my attention."

However, when Ms Woods’ predecessor Phil Twyford announced the Monark development in 2018, he told 1 NEWS the Government had already learned lessons from other struggling KiwiBuild developments and would no longer make first home buyers wait for long periods before their KiwiBuild homes were built.

"One of the things we have learned is that first home buyers don’t necessarily want to buy a place off the plans which won’t be built for another year and a half – so we won’t be doing much more of that," he said at the time. 

With Monark, it’s now looking like three years.  

Ms Woods told 1 NEWS she believes some KiwiBuild buyers have already had their deposits fully refunded by the Monark developer due to the ongoing delays.

"If someone in particular wants to touch base with my office we can certainly give them the details of the developer to have a conversation with along with their solicitor to see if they can negotiate an early release from their contract," she said.

But the Wellington Company director Ian Cassels says his company hasn't formed a position on that yet and they couldn't have an "endless amount" of people withdrawing from the development.

Mr Cassels sympathises with people waiting for their new home in his delayed development.

"That's not what our intention was - we had advanced negotiations with a contractor who I believe practically committed to it and then withdrew."

He is confident the development will be completed well before the sunset clause comes into play.