House prices up, family incomes down in Auckland

How can a young family hope to buy a home under this National Government when house prices are out of control and household incomes are falling behind?

The rapid rise in house prices in Auckland in the past year, even as the median family income in the region fell, shows that the current Government’s housing policies are failing New Zealanders, Green Party Co-leader Metiria Turei said today.

Figures released by Quotable Value today show that Auckland house prices are up 13.1% in the past year and 34.6% since the last market trough in March 2009. That compares with a 1% decrease in the median family income in Auckland in the past year and an 8% increase since 2009. House prices in Auckland continued to accelerate in the last month despite the Reserve Bank’s announcement of the introduction of Loan-to-Value Ratios.

“How can a young family hope to buy a home under this National Government when house prices are out of control and household incomes are falling behind?” said Mrs Turei.

“The Auckland property bubble is a threat to the economy and a barrier to families buying their own home. We need policies that will stabilise the housing market and ensure more affordable homes are built for young families.

“National has completely failed to deal with the shortage of good, modern housing at the affordable end of the market. More sprawl won’t fix that problem; a government-led building programme is the solution.

“Everyone benefits from a stable housing market. It gives families buying their home greater certainty over what their home will be worth in the future. That’s preferable to the current boom-bust cycle where home-buying can be a gamble and homeowners face losing equity through no fault of their own if they buy a house at the wrong time.

“A more stable market will also be less attractive to speculative investors, freeing up capital for the productive economy.

“The Greens believe that the government has a central role to play in fixing the housing market. We need a government-led affordable home-building programme, coupled with our Progressive Ownership plan that gives young families a pathway to home ownership. We need a capital against tax (excluding the family home) and restrictions on overseas investment in residential properties so that families have a fair shot at buying a home without being out-bid by speculators.

“These policies will protect Kiwi families from the boom-bust housing cycle and allow more young families to get on the housing ladder,” said Mrs Turei.

—