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.”


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Minister of Finance: Plan Shows $100 Billion Infrastructure Projects

Finance Minister Bill English has today launched the Government’s Ten Year Capital Intentions Plan (CIP) which shows a pipeline of $100.9 billion worth of infrastructure projects over the next decade. More>>


Werewolf: Safe Landings Gordon Campbell on the safety challenge to the Wellington runway extension.

The safety-related legal challenge revolves around the size of the 90 metre long Runway End Safety Area (RESA) being proposed for the runway extension. More>>


Environment Commissioner: We Need To Work Together On Climate Change And Farming

“The debate around agricultural emissions and the ETS has been polarised for too long,” said the Commissioner. “But the ETS is not the only way forward – there are other things that can be done.” More>>


NZ Super Fund: Seeking To Put A Market Price On Climate Change

Oct. 19 (BusinessDesk) - The New Zealand Superannuation Fund says it will devise a set of rules to assess investment winners and losers under climate change, a strategy that could rule out fossil fuels or producers such as current portfolio member Exxon ... More>>


Rejuvenation: Parata Will Not Contest 2017 Election

Education Minister and National List MP Hekia Parata has today announced that she will not be contesting the next election. She advised the Prime Minister of her decision earlier this year. More>>

Prisons Grow: Government Approves Plans For Increased Prison Capacity

Despite significant progress in reducing crime the number of prisoners has increased faster than projected. This is because the proportion of offenders charged with serious crimes has risen, meaning more people are being remanded in custody and serving more of their sentences in prison. More>>


Gordon Campbell: On Plastic Bag Activism, And Street Harassment

Amusing to see the Act Party experiencing another outbreak of young fogey-ism. What has aroused the ire of Act Leader David Seymour this time is the introduction of a Greens private members bill to the ballot process, calling for a 15 cents levy on plastic bags to reduce pollution. More>>


Unclear Weapons: US Navy Ship Cleared To Visit NZ For Navy's 75th

United States Navy ship, the USS Sampson, has been given clearance to visit New Zealand next month by Prime Minister John Key... “The process for considering the visit by the USS Sampson is the same as that used for all ships attending the International Naval Review." More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news