New Zealand Labour Party

Reserve Bank again highlights National's housing failure

National’s failure to deal with the housing crisis in New Zealand is once again being exposed by the Reserve Bank today, in a scathing assessment of the Government’s response, says Labour Finance spokesperson Grant Robertson

“Governor Wheeler is clearly worried about the housing market. The Reserve Bank says that ‘vulnerabilities in the Auckland housing market continue to increase and spread to the rest of the country’.

“Annual house prices rose by more than 30 percent in Queenstown, 27 percent in Tauranga, 25 percent in Hamilton and 21 percent in Wellington. These increases are unsustainable and are piling pressure on first home buyers. The Government still doesn’t have a handle on the housing crisis.

“The Financial Stability Report’s risk assessment is ‘vulnerabilities in the housing market have increased in the past six months’. The Reserve Bank also highlighted the pressures that households are facing, stating that ‘the household debt to income ratio now stands at 156 percent, a record high’.

“National has chosen to sit on its hands during this crisis, and the Reserve Bank is putting it on watch. The Bank says ‘Building activity has been slow to meet demand for houses, particularly in Auckland’.

“The Reserve Bank also highlights the effects that speculators are playing in the market, and the fact that they ‘benefit from tax deductions that are not available to many owner-occupiers’.

“This report should act as a wake-up call for National, but despite so many wake-up calls on housing the Government remains asleep at the wheel.

“The message from the Reserve Bank is clear: the housing crisis is presenting a risk to the future financial stability. Only a Labour’s comprehensive housing policy can deliver security and opportunity for New Zealanders through affordable homes, lower debt, and a more balanced economy,” says Grant Robertson.