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Budget 2020 impact on Kāinga Ora’s medium-term financing requirements - 14 May 2020

Today the New Zealand Government announced, in Budget 2020, funding to help deliver 8,000 new public housing and transitional housing places over the next four years.

This funding is in addition to the Government’s existing commitments to provide 6,400 new public houses over the four years from July 2018 to June 2022, and will be delivered by Kāinga Ora, Community Housing Providers and transitional housing providers.

Read the full media statement

Overview

Kāinga Ora - Homes and Communities is the largest residential property owner in the country, owning or managing around 66,000 properties that house around 200,000 New Zealanders.

Kāinga Ora has two key roles:

  • being a world-class public housing landlord, and
  • partnering with the development community, Māori, local and central government, and others on urban development projects of all sizes.

For more information on Kāinga Ora, read about us or download our latest Investor Update [PDF, 4.1 MB].

Financing

Kāinga Ora’s main subsidiary, Housing New Zealand Limited, re-entered debt capital markets in 2018, following a 19-year absence.

Kāinga Ora group’s Borrowing Protocol, which sets a limit on external borrowing, was increased from $150 million to $1,080 million in May 2017 to help finance the Auckland Housing Programme.

Under the current government, the limit increased from $3,050 million in June 2018 and again to $7,100 million in January 2020 to help us to continue financing much-needed warm, dry and safe houses across New Zealand.

In Budget 2020, the government announced funding to help deliver 8,000 new public housing and transitional housing places over the next four years.

This is in addition to the Government’s existing commitments to provide 6,400 new public houses over the four years from July 2018.

The 8,000 additional housing places will be delivered by Kāinga Ora, Community Housing Providers and transitional housing providers. The Ministry of Housing and Urban Development will be updating the Public Housing Plan, working in partnership with the sector over the coming months, and as part of that the financing arrangements for the additional places will be confirmed.

Kāinga Ora will need to increase its borrowing over the next few years to finance its proportion of the additional 8000 places. Subject to confirmation of these financing arrangements, we anticipate annual net bond programmes over this time to be a similar size to the 2020 calendar year programme of around $2 billion.

A strong focus on sustainability and wellbeing outcomes

Our Sustainability Financing Framework explicitly recognises the role we play in improving wellbeing outcomes for New Zealanders, and enabling us to link our financing requirements accordingly.

Read more around our focus on our sustainability and wellbeing page.

 

Disclaimer

The information on this webpage is issued by Kāinga Ora - Homes and Communties for informational purposes. To the extent that this webpage refers to an offer of securities, no offer is made to anyone accessing this webpage outside of New Zealand and otherwise than in compliance with any applicable securities laws or regulations. To the extent that this webpage refers to any offer of securities to any person in New Zealand, such offer will be made to only wholesale investors and in accordance with the Financial Markets Conduct Act 2013 (FMCA).

Users accessing this webpage acknowledge and accept that they will comply with any applicable securities laws or regulations (including, without limitation, the FMCA).

Page updated: 3 June 2020