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New research shows need for government-led house building

Research by economist Shamubeel Eaqub shows the need for the government to lead the building of affordable starter homes, as would happen under Labour’s KiwiBuild policy, says Labour’s Housing spokesperson Phil Twyford.

“Mr Eaqub’s research shows that it was government participation in house-building that created our home-owning society. To save the Kiwi dream of owning your own place, we need government to once again take the lead in building affordable homes.

“Starting with the First Labour Government and continuing through to the 1980s, New Zealand governments were active in house-building. Governments built up to 10,000 state houses a year – many of which were bought by their tenants – and subsidised the construction of thousands more through the State Advances programme.

“Mr Eaqub found the house-building rate was eight homes per 1,000 people a year from the 1940s to 1980s. Since the government pulled out of house-building, the construction rate has plummeted to five per 1,000 people, a cumulative 500,000 fewer houses.

“Despite record demand and a massive housing shortage, we’re building 10,000 fewer houses a year now than in the 1970s and people are living in outdated, cold houses.

“In the 1960s and 1970s, when homeownership was on the rise, 30-35 per cent of the new houses built were entry-level homes. Today, that proportion has fallen to just 5 per cent.

“The average new house now is 200sqm and costs $400,000, not even counting the land. We are simply not building the good, affordable homes young families need to get on the housing ladder.

“It’s no coincidence that homeownership rose throughout the time that government was helping to build affordable homes, and started falling from 1991 onwards. Homeownership is now at its lowest level since 1951. Yet, National still refuses to roll up its sleeves and build some houses.

“Labour will build 100,000 affordable, starter homes for first homebuyers under our KiwiBuild programme. We will restore the Kiwi dream of owning your own place. We’ve done it before; we’ll do it again,” says Phil Twyford.