New Zealand Labour Party

Government failure on housing crisis drives Reserve Bank to add tools

If the Government was delivering a comprehensive plan to fix the housing crisis, it is unlikely that the Reserve Bank would be continuing to pursue debt to income limits for lending for housing, says Labour’s Finance spokesperson Grant Robertson.

“A Labour Government would be implementing our plan to fix the housing crisis, including building thousands of affordable homes through Kiwibuild and the Affordable Housing Authority, and cracking down on speculators through taxing the capital gains of those who sell investment properties inside five years and banning offshore speculators.

“The National Government is failing to act in these areas, and has effectively outsourced housing policy to the Reserve Bank. The Bank is now pushing ahead with a desire to implement debt to income ratios, but the government has asked for ‘more information’.

“This looks like National stalling for time as it desperately searches for a response to the crisis.

“We have concerns that blanket debt to income ratios will exclude even more first time buyers from getting into a home. More than a third of lending to owner-occupiers in the year to May was at a debt to income ratio of five or more. This includes many first home buyers. If ratios are applied across New Zealand that will also shut out those in regions without the over-heated market we see in Auckland.

“The Reserve Bank is rightly concerned about the effect of the housing crisis on financial stability but they are being left alone to deal with it by a Government that has simply lost control of the issue.

“It is clear they do not have a plan, and the only answer is to change the Government and see the implementation of a well thought through set of policies that will give New Zealanders the security and opportunity of stable and affordable housing,” says Grant Robertson.