Housing Needs Untouched by Budget There is no housing crisis says John Key. People can still find houses to buy on Trade Me. That was the Prime Minister’s glib answer this morning when questioned on the OECD report that New Zealand is the least affordable place to buy a home in the developed world. The Treasury gave a sharp warning about how serious the problem is becoming. Currently to buy an average priced property with an 80% mortgage, it costs 44% of the average full-time wage. In five years. Treasury says it will cost 63% of the average full-time wage and in Auckland 86%. It warns that with immigration soaring to close to 40,000 a year, the situation is bound to get worse. Home ownership rates are falling, probably to below 50% in Auckland. For those earning below average incomes the Kiwi dream of owning your own home is being lost. For middle income earners, with interest rates projected to rise over the next year or more by a couple more percent, home ownership is becoming a struggle. People, particularly in Auckland, are increasingly destined to being tenants in their own land. The budget answer, lowering the price of gib board from Thailand and nails from China, is pathetic given the scale of the problem. Labour’s answer goes a long way further towards solving the problem: - discourage speculation and property investors forcing prices up through a capital gains tax on investment properties - excluding foreign speculators from buying up existing homes - ensuring a smoother flow of immigration, by tightening migration criteria when flows become too high - increasing supply of houses through Labour’s Kiwibuild programme with the goal of building 100,000 new, affordable homes over 10 years - dealing with problems caused by bottlenecks in the supply of land, building materials and labour, the latter by revitalising New Zealand’s apprenticeship system. Listen to my speech in Parliament last Friday here on National’s failure to deal with the the housing crisis. inthehouse.co.nz/video/33072
Posted on: Sun, 18 May 2014 21:53:34 +0000
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