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

 

Parliament Today:

Werewolf: The Defence Pretence

Last year, the world began spending more money on weapons again, for the first time since 2011... New Zealand belongs to a region – Asia and Oceania – where military spending rose sharply in 2015, by 5.4 per cent. More>>

ALSO:

Gordon Campbell: On Not Crying Foul, Argentina

So a couple of guys found to be criminally liable of environmental pollution in Argentina lodge an application with the Overseas Investment Office… in order to buy some prime New Zealand rural land. Seems that their factory back home had carelessly and/or intentionally discharged toxic waste into the Lujan river. Bummer... More>>

ALSO:

Urban & Rural: $303m To Merge And Modernise New Zealand’s Fire Services

Internal Affairs Minister Peter Dunne today announced funding of $303 million over five years to combine urban and rural fire services into one organisation from mid-2017. More>>

ALSO:

High Trust Regime: What Did The PM Tell His Lawyer About Foreign Trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed. More>>

ALSO:

Road Crime: Wicked Campers Vans Classified As Objectionable

The definition of publication includes any "thing that has printed or impressed upon it, or otherwise shown upon it, 1 or more (or a combination of 1 or more) images, representations, signs, statements, or words", The Classification Office has previously classified such 'things' as billboards, t-shirts, and even a drink can. This is the first time the Classification Office has classified a vehicle. More>>

ALSO:

'When New' Repairs: Landmark EQC Settlement

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations. More>>

ALSO:

Gordon Campbell: On Kiwirail’s Latest Stint In The Dogbox

The denigration of Kiwirail continues. The latest review (based on a 2014 assessment) of the options facing the company have enabled Kiwirail to be hung out to dry once again as a liability and burden on the taxpayer. More>>

ALSO:

Royal Society Report: Good Opportunities To Act Now On Climate Change

There are many actions New Zealand can and should take now to reduce the threat of climate change and transition to a low-carbon economy, a report released today by the Royal Society of New Zealand finds... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news