"This is a very well-proven model overseas"
Default KiwiSaver provider Simplicity and home builder NZ Living have worked together to launch a new significant build-to-rent housing program to provide New Zealanders with another housing option.
The program aims to build high-quality but affordable homes for rent across New Zealand. Simplicity Living will build the houses, while certain funds within the Simplicity KiwiSaver Scheme (excluding the default fund) and the Simplicity Investment Funds will own and provide funding to Simplicity Living through a wholesale funding arrangement.
“This is a very well-proven model overseas. Pension funds in Europe commonly invest 5% to 20% of their funds this way and achieve solid returns,” said Simplicity managing director Sam Stubbs. “Within 18 months, we're aiming to build and rent one home a day.”
The KiwiSaver provider intends to offer its members the first option to rent the homes. Meanwhile, the NZ Living team, experts, and established subcontractor and supplier base will transfer to Simplicity Living – with owners Shane and Anna Brealey managing the company on a pro-bono basis
“We have decided to devote the next phase of our lives to building as many affordable, quality homes for rent as possible,” Shane said.
Read more: National proposes new build-to-rent housing bill
So far, NZ Living has completed or has in construction 700 new homes, selling at a discount to a valuation of $30 million to help first-home buyers (FHBs) enter the property market.
Subject to necessary approvals, Simplicity Living will purchase NZ Living's two remaining developments in Auckland, with 159 apartments in Onehunga and Point England.
Shane commented that the combination of Simplicity's ability to fund at scale and NZ Living's building skills would most likely impact the housing sector positively.
Anna added: “We aim to rent for the long term, so families, the elderly, and those saving for their first home can have true housing security without having to own a home.”
The new build-to-rent program brings to light the New Zealand National Party's proposed bill to boost build-to-rent development across New Zealand.
National's Boost Build-to-Rent Housing Bill enables investment in purpose-built rental properties that provide greater security of tenure, professional landlord services, and experience of staying in newly built accommodation.
It aims to exempt build-to-rent developments from some aspects of the Overseas Investment Act 2005 in the same way as retirement villages, rest homes, and student hostels and ensure that the build-to-rent properties are treated as a commercial building for the Income Tax Act 2007.
In a previous statement, National List MP, based in Wellington, Nicola Willis said: “Kiwis are crying out for fresh thinking and new ideas to solve New Zealand's housing woes. National will continue to offer up practical, constructive ideas, like this bill, to help supercharge housing supply in this country.”
