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Budget numbers show National’s failure on home affordability

17 May 2013

Budget numbers show National’s failure on home affordability

The Budget’s projection that house prices will rise between 23 percent and 46 percent by 2017 exposes the National Government’s lack of action on affordable housing, Green Party Co-leader Metiria Turei said today.

Figures in the Budget Economic and Fiscal Update show house prices rising above the rate of general inflation throughout the forecast period. In the ‘main forecasts’ scenario, house prices will rise a cumulative 23.4 percent between the start of this fiscal year and June 2017. In the ‘upside scenario’, the cumulative rise in house prices over the same period is 45.6 percent. During the same period, the average weekly wage is projected to rise by just 13.3 percent.

“National has offered no vision and no investment to make housing more affordable for Kiwi families,” said Mrs Turei.

“Bill English’s budget numbers confirm the truth: under National’s policies, the house price bubble will keep inflating and homeownership will get further out of reach.

“A 23 - 46 percent rise in house prices by 2017 is completely unsustainable. House prices are already too high for young families to get a place of their own.

“The forecast rise in house prices equals a surge in mortgage debt. That means New Zealand will be more indebted to the Australian-owned banks, more profits will flow out of our country, and families will be more exposed to interest rate hikes.

“The Budget numbers are a tacit admission that National’s agenda of facilitating more urban sprawl won’t result in affordable houses being built.

“We need a positive plan for affordable housing.

“The Greens’ Home for Life package will give young Kiwi families a pathway to homeownership through the Progressive Ownership scheme. The Greens will ensure that affordable homes are built and that young families get to own them.

“At the same time, we will stop speculators over-inflating the housing market by introducing a capital gains tax on housing excluding the family home, by tightening lending rules, and by changing the rules around non-resident investors in housing,” said Mrs Turei.

Additional information:

House prices % change (main)6.8%7.3%2.8%2.6%2.1%23.4%
House prices % change (upside)7.0%12.7%10.7%6.3%2.7%45.6%
Average Weekly Earnings % change2.9%2.3%2.0%2.3%3.1%13.3%
sourced from Budget Economic and Fiscal Update 2013, figures 1.19, 3.4, 3.5, and additional information table 4

The Green Party Home for Life paper


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