Housing prices go up – Gens X & Y give up

Today’s REINZ report shows house prices continue skyward while first home buyers are dropping out of the market, says Labour’s housing spokesperson Phil Twyford.

“According to the Real Estate Institute of New Zealand the national median house price has risen by 10 per cent to $440,000 in the past year. In Auckland there is a new median high of $637,000.

“When you couple this with a fall in sales at the bottom end of the market you are looking at a disaster for first home buyers. For house sales below $400,00 there has been a drop of 21.9 per cent in the market.

Meanwhile Veda Advantage reports mortgage applications from Generation X and Y borrowers fell more than 13.5 per cent in the March quarter from a year ago, while their applications for personal loans grew more than 12 per cent. Veda managing director John Roberts has been reported saying Generations X and Y feel locked out of home ownership and are in the market upgrading cars and buying other consumer durables to enhance a lifestyle that home ownership would normally offer.

“Generations X and Y have all but kissed goodbye to the dream of home ownership. With slightly more than half of all New Zealanders now renting, that makes a rootless and insecure existence the new norm. No wonder Gens X and Y are splashing out on their credit cards.

“All of this is due to National’s failure to tackle the housing crisis and the unfortunate experiment of Loan to Value Ratio (LVR) lending restrictions.

“Under National the big end of town is doing very well. Nearly 600 homes worth a million plus have been sold – up over 100 on last year,” says Phil Twyford.

“Labour’s solution is simple, we need a Capital Gains Tax, we need to build 100,000 affordable homes, and we need to exempt first home buyers from loan to value ratios.”

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