Housing policy fails New Zealanders | The Jackal

12 Aug 2013

Housing policy fails New Zealanders

Instead of a bold move to actually do something about the unaffordable housing issue, National is tinkering around the edges with yet another laissez-faire response designed to keep the status quo. In fact National's proposed changes will in many ways make things worse for those trying to get onto the property ladder.

Today, the NZ Herald reported:

By lifting the income threshold for eligibility and the price of a house for which the subsidies can be used, more people will become eligible.

However, not all the changes are beneficial.

Fewer single-home buyers will qualify for a subsidy because the qualifying income limit has been reduced from $100,000 to $80,000 for the KiwiSaver deposit and from $85,000 to $80,000 for Welcome Home loans.

And single buyers have comprised 37 per cent of savers who have accessed the KiwiSaver deposit subsidy.

National's policy will ensure that less single buyers will qualify. Yet they still claim that the scheme will increase the overall uptake by 1650 per year over the next four years. Even if their figures are correct, which is doubtful, this policy in no way addresses the huge shortfall in available houses, which is estimated to be 10,000 per year in Auckland alone.

John Keys government will simply allow people to get even more into debt, which is obviously not a solution to the housing crisis or our lethargic economy. Causing more Kiwi families to become debt slaves for longer periods of time is clearly not beneficial for New Zealand.

The Government has also abolished a major feature of the Welcome Home loan - the ability to access a loan without having a deposit, as long as the buyer could service the mortgage.

Changes to both schemes announced by Mr Key at the National Party conference in Nelson mean buyers must have a minimum 10 per cent deposit.

So anybody who cannot afford to save a 10 per cent deposit will also not qualify. The problem here is that low incomes and high rents in New Zealand often mean people aren't able to save enough in the first place to afford a deposit. By requiring a higher deposit ratio than all the banks, National is ensuring that people on low and fixed incomes can never hope to achieve the Kiwi dream of home ownership. They will be stuck renting forever, which serves the property speculators and National's interests perfectly.

Despite these major flaws in the policy, National still claims that it will make housing more affordable. However, with no policy directed at building anywhere near enough houses to supply market demand, National is effectively just increasing pressure on the housing bubble, which will push up prices even further out of reach of your average Kiwi family. Only the speculators will be able to afford houses under National's scheme, a scheme that will ensure there is an overabundance of renters.

Clearly the hands off free market ethos has totally failed. It's also pretty obvious that John Key has no real answer to Labour and the Greens excellent housing policy initiatives. Only these initiatives will halt the ever declining home ownership rates. Only these initiatives will ensure there will be enough houses in New Zealand to meet our requirements.

Kiwibuild: 100,000 Modern Affordable Homes - Factsheet (PDF)
Home for life: Green party Discussion Paper (PDF)