I’ve no problems with the build quality of state houses in the past. Owned one myself years back and it was built to last damn near for ever – and they came with decent bits of land relative to todays handkerchief sized parcels.
Today you can build a house for around $1,000 a sqm, getting down to $700 at the very low end – but I don’t think you get much at this level to meet modern living needs. For example, you’ll probably only get one electrical socket per room. So you could end up with a $100,000 build cost for a 100sqm house.
However the Dept of Build and Housing has a build cost of $1600 a SQM. Knock of 25% for mass production you are still left with a $1200 build cost. And say $100,000 for land you are looking at a total of at least $200,000 for a modest govt house.
If the shared equity works at say 30% the buyer still has to come up with $140,000 through deposit and mortgage – still, in my view more than those this package is aimed at could afford.
So how do you make it more affordable – you have to reduce the build cost even more. You either get cheaper land – which means it will be some swamp at the back of a sewer works and/ or cut the cost of materials/labour going into the build.
Footnote: and the other issue to consider is the value of this house in five years time. If the market drops in value due to additional supply these types of houses will, in my view, be the first to suffer. So say you buy your house for $200,000. In a few years it could be worth $190,000. You’ve “lost” $6,000 and the tax payer is out of pocket $4,000. Owners of low cost apartments in Auckland can probably recount their experiences which may have some parallels.