New Zealand Labour Party

National’s housing band aid

Throwing subsidies at an under-supplied housing market is one last desperate bid by National to be seen to do something about the housing crisis, says Labour’s Housing spokesperson Phil Twyford. 

“First home buyers have been the collateral damage of National’s housing policy. They have been hammered by policies that have given speculators a free rein. But chucking more subsidies at the problem without increasing the supply of housing, risks making the problem worse.

“National has allowed a shortfall of 40,000 homes to build up in Auckland and it is getting worse by 5-7000 houses a year.  Stoking demand while there is such a supply shortage is economically illiterate. 

“As mortgage brokers and economists have pointed out, National’s homebuyer subsidies are likely to just push house prices higher. The Government knows this. They have been told it by their own officials and numerous commentators. 

“The other shameless deceit in this policy is that fewer than 10% of HomeStart grants are going to Auckland home buyers because there are so few homes in Auckland under the $600,000 threshold.  Mortgage broker Bruce Patten said this morningthat the Government’s quoted figure of 18% affordable homes sales in the city was misleading and in reality the number of affordable homes sold would be less than 10 percent. 

“If National had taxed speculators, banned foreign buyers from buying existing homes, and run a massive programme of building affordable homes, as Labour will do, then increasing subsidies for first home buyers might make sense. 

“But in the absence of those policies addressing supply and demand, this is just another short term band aid that will make the housing crisis worse,” says Phil Twyford.