In the short term Mike Kiely, POS Chair of the Board of Trustees, told The Planner magazine that private house builders are already pausing projects as they wait to see how the new system pans out. "If they can make more money they will hold out for what better suits their model," he says.
Kiely added, "in the past, RSLs [registered social landlords] picked up the baton during downturns. During the past recession and in the 90's, there was an awful lot of RSLs buying stuff in the maket and building it out."
On top of this, Kiely pointed out that the new starter homes won't represent a permanent addition to the stock of affordable housing because the discounts will only apply for five years."If the 20 per cent presumption was in perpetuity you could see it instituting a general reduction that would enable people to gain a foothold on the market, but it's only for five years. It's the best investment product going and is just going to inflate prices," he warns.