Labour claims they can build Auckland homes for $360,000

The Herald reports:

would be able to offer first home buyers two-bedroom properties in Auckland for as little as $360,000 if elected, party leader David Cunliffe announced today.

Labour’s KiwiBuild policy would build 100,000 new, affordable homes over 10 years and sell them at cost to first home buyers, Mr Cunliffe said.

“Using the purchasing power of the Government and off-site building techniques we will be able to lower the cost of building a home.

“This will enable Labour to sell a new two-bedroom terraced KiwiBuild home for around $360,000 in some parts of Auckland.

“That compares to around $485,000 for a similar Hobsonville home.” …

Labour’s housing spokesman Phil Twyford said KiwiBuild would deliver the equivalent of a Hobsonville $485,000 two-bedroom terrace home for $360,000 by forgoing the developer’s margin on the land cost-saving $36,000 and a further $89,000 would be saved by using off-site manufacturing, bulk buying building materials and reducing builders’ margin through high-volume tendering.

If Labour do win the election, it would be amusing to see them actually try to implement the policy and the excuses they’ll come up when the homes cost way way more than that. Maybe they’ll blame the unions for pushing the price of labour up!

Socialist parties always think that the state can provide things cheaper if you get rid of the profit margin, and economies of scale. But, you know what? The history of the world is they almost never do.

By this logic, we would all have much cheaper food if the Government owned all the farms. Think how much cheaper our food would be if farmers did not make any profit from the land, and instead the Government just employed them all directly?

And think about how much cheaper our food would be, if the Government centrally purchased all agricultural supplies for farmers. It would reduce the cost of farming massively, and hence food.

How about this for a challenge to Labour. If they really think they can produce two bedrooms houses in Hobsonville for $360,000 at no loss, then why don’t they promise to reimburse the taxpayers for any homes they build that cost more than that? Why should it be our money they gamble with?

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