Banker’s doubts over LVRs another nail in the housing coffin

Thousands of first home buyers around New Zealand will be asking the Government what all the pain has been for after departing BNZ  CEO Andrew Thorburn said that the jury is still out on whether LVRs have worked, says Labour’s housing spokesperson Phil Twyford.

“When one of the most respected senior banking figures in Australasia questions whether LVRs have worked, it must raise doubts for all the first home buyers who have been the fall guys for National’s failed housing policy.

“All the data shows first home buyers have been shut out of the market, leaving offshore and domestic speculators to have a field day. Modest to middle income home buyers have been hobbled by 20% minimum deposits while the big end of town has been unaffected. And in the regions, towns and cities who already have static or declining house prices, have taken an unnecessary hit.

“Kiwis who long to own their own home would probably put up with some short term pain if they thought it was part of a serious plan to fix the housing crisis, build more affordable homes, and slow down runaway house price inflation, particularly in Auckland and Christchurch.

“Things are getting worse. The Reserve Bank says interest rates are heading to 8%. Consents for new builds in Auckland have dropped off. And desperate first home buyers have been driven into the arms of the finance companies.

“Hearing now that one of our most senior bankers thinks the jury is out on whether LVRs have worked is the unkindest cut, reducing the government policy on home lending to a cruel experiment on decent hard working Kiwis who just want a crack at the Kiwi dream.

“National’s total refusal to tackle the fundamentals by taxing speculators through a Capital Gains Tax, and by actually building large volumes of affordable homes for people to buy, has allowed the housing crisis to rage on out of control. Labour will implement a capital Gains tax and build 100,000 houses.”

—