David Clark
Every student should be able to aspire to own their own home. And that aspiration should be attainable.
Just last week the average valuation of a house in Auckland hit $1 million. That means even if young couples can save enough for a deposit in Auckland, they may need to spend half their income just servicing the mortgage. And that is while interest rates are low. That’s crazy.
Perhaps it’s no surprise that the level of home ownership is at its lowest rate since 1951. People aren’t able to afford it. Young couples are up against an impossible property market, where, unless you’re already on the ladder, unless you win Lotto, home ownership isn’t something you can even afford to dream about.
High levels of student debt are also having an impact. Before student loans were introduced, 50 percent of people aged 20-40 owned a home. That number stands at just 25 percent today.
These grim numbers represent what most people recognise in New Zealand – that we have a housing crisis. Speculators are the ones doing well: buying and flicking on homes for massive profits, while the rest of New Zealand, particularly first home buyers, are being left behind.
So is today’s generation destined to rent? Certainly under the current government.
John Key and Michael Woodhouse won’t even admit there’s a housing crisis. While their heads are buried in the sand, house prices continue to soar, levels of home ownership continue to drop, and hundreds of people are forced to sleep in cars and utilise emergency accommodation – all because they are unable to afford to put a roof over their family’s heads.
But we don’t have to accept this —Government has the tools to make home ownership viable for New Zealanders.
Labour has a comprehensive plan to tackle the problem of housing affordability. We’ll setup an Affordable Housing Authority to work with the sector to build more affordable homes and undertake major greenfields and revitalisation programmes, and we’ll crack down on speculators. We’ll end National’s state house sell-off and stop using Housing NZ as a cash cow. We’ll instead refocus HNZ on what it does best—looking after people in need.
We cannot accept that young people will be resigned to renting for the rest of their lives. Government must be active in its approach to solving this problem. That’s why I’m proud that Labour has bold ideas to address the housing crisis. We will restore the Kiwi Dream.
Michael Woodhouse
The short answer is not if they don’t want to, but there are some challenges to first home ownership and the Government is working hard to overcome them. Be very cautious about oversimplified sound-bites from the opposition.
I think there are three main reasons why it feels challenging:
- Auckland dominates the discourse—It is our largest and fastest growing area and has been underinvested in for years. We simply haven’t built enough houses but that is being remedied with building activity at record levels.
- Constrained land supply —Urban limits, zoning restrictions and inflated development levies have had a big impact on supply and affordability.
- Housing stock mismatch —Since the early 1970’s the average house size has nearly doubled from 110m2 to over 200m2. Both our younger and older home buyers want smaller, lower maintenance apartments and condominiums but we haven’t built enough of them.
So what is the Government doing? Plenty. I’m limited by space but some of the components of National’s Comprehensive Housing Plan include: A billion dollar Housing Infrastructure Fund to provide targeted interim funding for roading, water and other infrastructure required for new housing, especially where financing issues are holding up development.
The Government’s Special Housing Areas around the country have assisted local authorities to free up more land for residential development and to speed up the consenting processes. The Opposition opposed these when introduced by the Government, but the over 200 Special Housing Areas around New Zealand have the capacity for around 70,000 new homes.
We have introduced legislation overhauling the Resource Management Act to support housing development and business growth, while ensuring more effective management of the natural environment. RMA reforms will make it easier for councils and developers to get houses built and consented. Again, opposition parties oppose this needed reform.
Measures to identify and develop vacant or underused Crown lands for new housing; the removal of duties and tariffs on imported building materials, the National Policy Statement on Urban Development, and KiwiSaver HomeStart, a $435 million scheme, expected to help 90,000 first home buyers get into their first home over five years, are all part of the package.
The combined effects of these policies plus benign interest rates are keeping homeownership within reach of the first home buyer. Discipline in saving, getting into KiwiSaver early and setting realistic expectations that the first home is not the dream home will ensure it remains so.