The Government has announced a plan to tackle the country's housing affordability crisis, getting council's to free up more land and making it easier and cheaper to build new homes.
The long-awaited housing plan is due to go before Cabinet tomorrow, to be signed off, seven months after the Productivity Commission released a report on housing affordability.
The soaring price of property has been blamed on a shortage of availability, and Finance Minister Bill English said the first step to fix it is simply to build more homes.
The housing shortage is pricing many potential homebuyers off the market, particularly in Auckland, where it's estimated 10,000 more new homes a year need to be built than are currently going up, to keep pace with population growth.
The average price of a house 20 years ago cost around four times the average income, now it is nearly double that.
English said affordability is a serious problem, but assured it doesn't have to stay that way.
"There's a real shortage of good quality lower-priced housing," he told TV ONE's Q+A programme this morning.
"For the lowest quartile incomes, there's really no new housing being produced, apart from what the government is building."
English warned that rising house prices are "dangerous" for the country.
"People just seemed to assume that no matter what happens, house prices are going to go up.
"That has turned out to be quite dangerous for New Zealand. So we don't accept that house prices automatically have to rise.
He proposed that one way to drive prices down was to increase the number of houses on the market.
"The thrust of it is to make it easier, both commercially and in the planning process, to enable more houses not just (on) greenfields, but also within the cities," he said.
Crucial to the reforms will be legal changes which help councils open up more suitable land, and reduce red tape around building consents.
This, however, has already made some councils wary.
"The last time we dropped standards in terms of materials we had a lot of leaky homes, and we can't afford to compromise on these building consent processes," said Porirua mayor, Nick Leggett.
ONE News Political Editor Corin Dann , who interviewed English on Q+A, said the minister is "very determined to try and stop run-away prices, and keep the Kiwi dream of home ownership alive".
Dann said tackling the housing market issue is a "a hornet's nest" for Government ministers.
"The problem for the Government is if it simply increases supply too much and we see a big drop in prices, it's going to upset an enormous number of New Zealanders who have billons and billons invested in housing," he said.
"If it does nothing it is also risky, because there are increasing numbers of young New Zealanders frustrated and angry about not being able to get that home-ownership that they want."
Labour's Housing spokesperson Annette King says the Government appears set to disappoint New Zealanders by offering "token tinkering" in response to the housing affordability crisis.
"Bill English seems to think the housing affordability crisis can be solved by the usual National party hobbyhorses of weakening the Resource Management Act and lowering standards for property developers," King said in a statement.
"Such changes will only be tinkering around the edges for thousands of Kiwis. The Government clearly doesn't realise that the main problem is affordable housing for low and moderate income earners, who just can't find houses."
There is a tendency for new private sector-financed houses to be large and expensive, she said.
Home ownership and affordable housing rates have dropped dramatically from a peak of around 75% in the 1980s to 65% today, King said.
This has impacted on younger people, with nearly half the country's young people now in rental accommodation compared to 20% in the late 1980s,"another reason so many are leaving the country for good," she said.
King said it is time for a long-term housing policy, which includes "a real partnership with local government", starting by including housing as part of their core services.
What is needed is more houses in the $350,000 to $450,000 range
built, quality and efficiency standards in rentals, more social
housing and a capital gains tax to deter property speculation, King
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