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Housing crisis still a major risk to financial stability

The Reserve Bank Governor has sent a clear message to the National led Government that their failure to address the housing crisis represents a risk to New Zealand’s financial stability, says Labour Finance spokesperson Grant Robertson.

“The housing crisis that has developed over nine years of National government is their real legacy. Today’s Reserve Bank Financial Stability Report has highlighted the housing market as the number one risk factor in the economy. The Reserve Bank Governor has said that the rate of housing building “remains insufficient to meet population growth and address housing shortages”.

“The blame for this lies squarely at the feet of the National Government. They have denied the existence of a housing crisis and sought to blame everyone else for the shortfall in house building. There is an urgent need for a large-scale building programme of affordable houses.

“Only Labour has that plan through our Kiwibuild programme that will see 10 thousand houses built each year over 10 years. The report also highlights that the Reserve Bank has done all the heavy lifting in terms of controlling demand in the housing market. National have replied with weak, half-measures. Labour will crack down on the tax loophole that is giving speculators a free ride, ban off-shore purchasers of existing housing and tax those who flip investment properties within five years.

“Today’s report also makes clear that the risk represented by the housing crisis goes beyond Auckland with a need to increase supply to ‘address the underlying imbalance between demand and supply in many regions.’ New Zealanders are seeing the impact of this with those unable to afford to buy a house staying in rental accommodation, which in turn is driving up rents.

“The housing crisis is putting many families under stress. Today’s report shows that it also represents a major risk the economy as a whole. Dealing with it will be a top economic priority for the next Labour Government,” says Grant Robertson.