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Rapidly rising house prices shows bright line test failure

New data today showing Auckland house prices rose by $21,500 in a month show the Government’s bright line test to curb speculation on the housing market has been a spectacular failure, Labour’s Housing spokesperson Phil Twyford says.

Quotable Valuable data for October shows the value of the average Auckland house increased from $896,676 in September to $918,153 in October – an increase of 2.4 per cent in just one month

“That is nearly identical to the monthly increase between August and September of $21,800 or 2.5 per cent. It is more than three times the $6,800 or 0.9 per cent increase between September and October last year.

“What this shows is National’s much-touted measure to clamp down on skyrocketing house prices has been totally ineffective at reducing prices. It has failed to deter speculators from buying into the Auckland market.

“At the same time first home buyers are being locked further out of the market. Monthly increases of more than $20,000 are not sustainable and are more than the maximum subsidy available under the Government’s HomeStart scheme.

“National was warned by tax and legal experts that its bright line test was ‘a bad idea’, ‘incoherent’ and ‘ineffective’.

“The Government needs to put in place real measures to tackle the Auckland housing crisis – like a large-scale state-backed affordable housing development programme – and ban foreign speculators from buying existing homes,” Phil Twyford says.