Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 


The Reserve Bank has stopped the flow of new houses

25 October 2013 For Immediate Release

The Reserve Bank has stopped the flow of new houses to those that need it most….

The new mortgage lending restrictions are now causing a dramatic reduction in the number of new houses being sold, says leading residential new-home builder Jennian Homes. “We predicted this and now it is happening” says Jennian Homes Director, Richard Carver. “The Reserve Bank must act before it is too late.”

“The building industry has weathered the worst downturn since records began and the latest move with low equity mortgage restrictions is now dramatically slowing recovery where it’s most needed, which is first home builders,” says Mr Carver.

“It now becomes a simple economic supply and demand equation which will quickly push new house prices up and further hamper the ability of everyday New Zealanders to get into a new home. New Zealand has a housing shortage which is contributing to escalating house prices. To further restrict residential construction will do nothing to close the housing gap.”

Mr Carver is pleased to see that the Reserve Bank is finally starting to listen to the industry and may review the LVR scheme, especially in relation to first home owners. “We strongly encourage the Reserve Bank to act swiftly and exempt new house construction from the LVR regulations as this will increase the supply of new houses that are desperately needed.”

“We believe that new home construction should have been excluded from the loan-to-value ratio (LVR) rules for new homes in the first place.”

The LVR rules limit the number of home loans banks can and will make on purchases with a loan-to-value ratio greater than 80 per cent, meaning in most cases potential owners need to have a 20 per cent deposit. “Just look at what the ASB Bank has done recently. This will greatly impact on first home owners in both the existing and new home markets.”

Up to 15 per cent of national building consents could be negatively impacted by the new restrictions due to the estimated number of new housing starts that come from first home builders. This equates to around 3000 new houses on current consent forecasts. The actions from the Reserve Bank greatly alienates this sector of the market and further places the kiwi dream of owning their own home on the backburner for many hard working young New Zealanders.

The latest move by the Government continues a historic habit of penalising the building industry, following an attack on investors in May 2010 coupled with the increase in GST and ACC levies in recent years.

While the government promises 39,000 new homes in Auckland over the next three years, this is not realistic says Mr Carver. “Increasing the supply of land might help but where is the logic in restricting the supply of new houses?”

“The initiative is fundamentally flawed and the government needs to get real. Even if land is made more available, developers won’t reduce the price of the land so the cost of bringing the land to market will remain the same.”

As the government hides behind the Reserve Banks neutrality, the Kiwi dream of home ownership slips further from the grasp of those without a 20 per cent deposit. “It is no wonder that Labour is closing the gap in the polls as this government has stopped listening.”

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gaza.Scoop: UNRWA School, Ambulances Attacked - Gaza MOH

The Ministry of Health Gaza expresses its horror and outrage at the latest Israeli massacre moments ago at an UNRWA school sheltering displaced persons in Beit Hanoun. Ten people have been killed and there is a large number of wounded. More>>

ALSO:

Gordon Campbell:
On Gaza And Burning The Israeli Flag

One of the selling points in New Zealand’s campaign for a temporary seat on the Security Council is that we have a pluckily independent voice to offer on international conflicts.

This image is not entirely self-delusional. When we did occupy a temporary UN Security Council seat in the 1990s, New Zealand was forthright about the need for the international community to actively respond to the Rwanda genocide. On April 14, 1994, New Zealand, Nigeria and the Czech Republic were the only nations to call for a forceful UN intervention to halt the killings. It was a proud moment in the diplomatic record of the Bolger government.

What then, is the current National government doing with respect to the slaughter in Gaza? More>>

 

Parliament Today:

Minister Told Of FBI Investigation, Says INZ: Coleman Must Quit Or Be Sacked Over Dotcom Case - Harré

Immigration New Zealand has done the right thing in distancing itself from Jonathan Coleman’s claims that ministers were not aware of FBI involvement in Kim Dotcom’s residency application, says the Internet Party. More>>

ALSO:

Valedictory Season: Maori Party Founders Say Goodbye

Two major Maori MPs gave there farewell speeches to Parliament Thursday outlining their history, experiences, triumphs and regrets. More>>

ALSO:

Resignation Not Accepted: Transport Minister Breaches Aviation Security Rules

"Running late for a plane at Christchurch Airport, I without thought breached airport and airline security rules by entering the gate lounge through a door usually used for exit only..." More>>

ALSO:

TAIC Report: Urgent Recommendations After Melling Rail Accident

The Transport Accident Investigation Commission has made four urgent recommendations to KiwiRail following the accident two months ago (27 May) when a Matangi passenger train collided with a stop block at Melling Station, Lower Hutt. More>>

ALSO:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

EPA: Board Of Inquiry Rejects Basin Flyover By Majority Of 3 To 1

The independent Board of Inquiry delegated to decide on the Basin Bridge Proposal has, by a majority decision (3 to 1), cancelled the Transport Agency’s Notice of Requirement and declined its resource consent applications for the construction, operation and maintenance of a flyover on State Highway 1 in Wellington City... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news