The Government's been forced to step in and guarantee a Wellington KiwiBuild apartment development for $40 million after repeated delays.
The deal means if the developer can't sell the apartments, the Government will be forced to buy them for $500,000 each.
The $40 million underwrite is double the previous figure after Monark's developer sought extra assistance.
Demolition work is underway at the Monark site in the capital’s CBD which, when completed, will feature 93 one- and two-bedroom new apartments - 44 of them being KiwiBuild houses.
The development was originally due to be completed in July this year.
First that was extended until December this year.
Then the Wellington Company, which is in charge of the development, delayed it again until October 2021.
In May, the Wellington Company cited Covid-19 as the reason for its latest delayed construction target of June 2022.
The June 2022 date is one month before the sunset clause comes into effect in July 2022 - where the developer or buyers can terminate the contract.
It raised fears the KiwiBuild buyers could be without a home three years after paying their deposit.
National's housing spokesperson, Nicola Willis, said taxpayers were now facing an increased financial risk on behalf of the Government facing “yet another KiwiBuild disaster”.
Housing Minister Megan Woods told Stuff today the Government was being pragmatic by underwriting the remaining 49 apartments.
"We fully acknowledge that the kinds of delays that can happen with building developments are not ideal for KiwiBuild buyers who want to get into their new homes as soon as possible,” she said.
Last month, Ms Woods told 1 NEWS the repeated delays were very disappointing.
"It is very unfortunate for those first home buyers who are caught up in this.”
Ms Woods said 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 said 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.