Jennian Comes Out in Support of Master Builders Proposal
Jennian Comes Out Swinging in Support of Master Builders Proposal
The mortgage lending restrictions implemented by the Reserve Bank are causing a dramatic reduction in enquiry for new houses that will eventually lead to fewer homes built, 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.”
Jennian Homes has come out in strong support of the proposal put forward to the Reserve Bank by the Registered Master Builders Federation, calling to exempt new homes from the damaging loan-to-value ratio (LVR) restrictions.
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 LVR rules in the first place.”
Housing Minster Dr Nick Smith says consent numbers are not showing any major reductions but he fails to see that a significant drop in enquiry today will not be fully realised in consent numbers until April 2014.
Up to 30 per cent of new building enquiry is being negatively impacted by the new restrictions. This equates to thousands of new houses on current consent forecasts.
The actions from the Reserve Bank greatly alienates young New Zealanders from entering the new home market and further places the kiwi dream of owning their own home on the backburner. This will benefit property investors at the expense of would be home owners.
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.
Further to this handbrake being applied to the new housing industry, some economists are now predicting the first interest rate hike to be as early as January 2014. If this comes to fruition it would be nothing short of the Government continuing to kick the industry while it’s down.