The tall order is partly why the KiwiBuild scheme – which has included a government pledge for 100,000 affordable new homes for first-time buyers in the next decade – has already proved controversial. The government’s political opponents, and critical pundits balked when the first recipients of the fixed-price, unsubsidised homes revealed themselves to be a soon-to-graduate medical student and a marketing manager. Critics argued that the houses, and the wide range of incomes allowed to apply for them, showed KiwiBuild was little more than middle-class welfare.

Fixed or broken?

State interventions to put first-time home ownership within the reach of low-to-middle income buyers are not unusual. Britain’s Help to Buy programme, for example, allows interest-free government loans to partly cover the cost of a property. In the United States, subsidy programmes for first-home buyers are also common.

Subsidy programmes often face criticism, however, that they drive up prices and still only benefit those who can almost afford a home, although a report produced for this year’s budget about Help to Buy said it had been successful in generating new houses that would not have otherwise been built.

But New Zealand’s model for KiwiBuild is different because those buying the homes do not receive government subsidies to help them put down a deposit or service a mortgage. The government doesn’t pay for construction of the homes, either. It merely guarantees to developers that a certain number of properties will be purchased at a fixed price, giving them the security they need to proceed with construction projects.

The fixed prices, which vary depending on location, are meant to prevent the bidding wars that have locked out so many buyers. In Auckland, for example, homes cost between NZ$500,000 ($338,000) for one bedroom and NZ$650,000 for three bedrooms.

KiwiBuild homes can only be sold to those who make less than the specified income cap: NZ$120,000 NZD ($81,000) for sole buyers, and NZ$180,000 for couples. But these figures have also caused controversy. The median New Zealand income was $NZ41,200 last year, and the average household earned $NZ105,719. The average is lower for people in their 20s, who earned less than every other age group except teenagers and retirees.