National’s failure to tackle the housing crisis is putting the economy way out of kilter, with borrowing rising four times faster than incomes - the fastest rise since the financial crisis, says Labour’s Finance spokesperson Grant Robertson.
“The Government’s inability to rein in the housing market is forcing New Zealanders to borrow huge amounts of money to get onto the home ownership ladder because house prices are rising much faster than incomes. Household debt is now at above 160% of GDP – higher than before the GFC.
“Reserve Bank figures show borrowing rose by 8 per cent compared to last year. With 46 per cent of lending in Auckland going to investors, it’s making it even harder for middle New Zealand to buy a house without borrowing eye-watering sums of money.
“According to realestate.co.nz figures out today the average price of a New Zealand house is now a record $570,000, up 7 per cent in a year.
“The Reserve Bank Governor has repeatedly warned of the financial risks from the housing market and increasing borrowing. Nothing the Government did in the Budget will make a jot of difference. House prices will keep skyrocketing, borrowing will continue to increase and financial stability will be put under further scrutiny.
“The Government needs to admit it has failed to get to grips with housing and take a leaf out of Labour’s book. There must be a comprehensive Government programme to build thousands of houses across the country and a meaningful plan to crack down on offshore speculators,” says Grant Robertson.