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

Gordon Campbell: On DHB Deficits And Free Trade

Currently the world is looking on aghast at the Trump administration’s plans to slash Obamacare, mainly in order to finance massive tax changes that will deliver most of their gains to the wealthy. Lives will be lost in the trade-off. Millions of Americans stand to lose access to the healthcare they need.

Spot the difference with New Zealand, where DHBs are under intense pressure to reduce deficits within a climate of chronic underfunding. More>>

 
 

Greens' Response: Slum-Like Rentals Exposed In Renting Review

“...The grim findings of the review are a wakeup call about the true state of rentals in this country. Too many renters are festering in slum-like conditions under the thumb of landlords who have largely unchecked powers and ignore tenants’ complaints when it suits them.” More>>

ALSO:

Gordon Campbell: On The Life And Times Of Peter Dunne

The unkind might talk of sinking ships, others could be more reminded of a loaded revolver left on the desk by his Cabinet colleagues as they closed the door behind them, now that the polls in Ohariu had confirmed he was no longer of much use to National. More>>

ALSO:

Gordon Campbell: On Labour’s Campaign Launch

One of the key motifs of Ardern’s speech was her repeated use of the phrase – “Now, what?” Cleverly, that looks like being Labour’s response to National’s ‘steady as it goes’ warning against not putting the economic ‘gains’ at risk. More>>

ALSO:

Lyndon Hood: Social Welfare, Explained

Speaking as someone who has seen better times and nowadays mostly operates by being really annoying and humiliating to deal with, I have some fellow feeling with the current system, so I’ll take this chance to set a few things straight.. More>>

ALSO:

Deregistered: Independent Board Decision On Family First

The Board considers that Family First has a purpose to promote its own particular views about marriage and the traditional family that cannot be determined to be for the public benefit in a way previously accepted as charitable... More>>

ALSO:

Transport Policies: Nats' New $10.5bn Roads Of National Significance

National is committing to the next generation of Roads of National Significance, National Party Transport Spokesperson Simon Bridges says. More>>

ALSO:

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election