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Housing crisis downgrade threatening banking sector

The out of control Auckland housing market is now threatening the banking sector, with Standard and Poor’s downgrading the credit rating of our banks out of fear of the bubble bursting, Labour’s Finance spokesperson Grant Robertson says.

“Today we have seen ANZ, the Bank of New Zealand and Westpac cut from an A- rating to a BBB+ rating while ASB’s rating has been cut from A to A-.

“The Government sat on its hands while a speculative bubble built up in the Auckland housing market and this is the outcome.

“The banking sector has remained stable through major international shocks in the last decade.

“For years, the Government has been warned of a bubble and done nothing. Now, just when our economy is suffering the impact of the collapse in dairy prices, our banking sector takes a hit because of the housing bubble.

“This is yet another wakeup call to the Government that it is time to get serious about reining in the Auckland housing market.

“They should immediately start a large scale home building programme and crack down on the foreign speculators that have been driving up prices,” Grant Robertson says.