The Government must rule out introducing loan-to-income ratios following reports the Treasury is looking at the measure to cool the Auckland housing market, Labour’s Housing spokesperson Phil Twyford says.
“It comes as no surprise that the Treasury is pushing for new rules to restrict the amount home buyers can borrow based on the amount they earn.
“Such measures in England and Ireland have curbed skyrocketing house prices but they have come at a price – they’ve locked first home buyers further and further out of the market.
“First home buyers have been hammered by National’s failure to get a grip on the housing crisis. Loan-to-value ratio restrictions made it worse for them. Loan-to-income ratio limits would just rub salt in the wounds.
“With the median Auckland house price of $771,000 already nearly the equivalent of 10 times the median household income, few people will be able to buy into the market.
“The Treasury is being forced to look at these measures because of the Government’s inaction. National has taken only grudging half-measures to rein in Auckland property prices and only when it has been forced by public opinion.
“The Government needs to embark on a massive state-backed building programme to flood Auckland with affordable houses and crack down on foreign speculators.
“Until it does, the Treasury and the Reserve Bank will have to keep doing National’s job for them,” Phil Twyford says.