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Key’s kick in the teeth to first home buyers

Phil Twyford
Spokesperson for Housing

David Parker
Spokesperson for Finance

15 July 2013

Key’s kick in the teeth to first home buyers

John Key is shutting thousands of first home buyers out of the market with his plans to impose lending limits for home mortgages, Labour’s Housing spokesperson Phil Twyford and Finance spokesperson David Parker said.

Labour understands the Reserve Bank will soon announce limits on high Loan to Value Ratio (LVR) home lending without an exception for first home buyers.

“Prices are spiralling out of the reach of first home buyers. Putting lending limits on banks will prevent poorer families becoming home owners. It advantages property investors and locks out first home buyers,” says Phil Twyford.

"That’s why Labour would apply an interim exception for first home buyers while we fix the supply crisis with our KiwiBuild programme of building 100,000 affordable homes over 10 years and bring in a capital gains tax to ward off speculators.

“Around 70 per cent of first home buyers have lending ratios of 80 per cent or higher. High LVRs simply give cashed-up speculators and property investors a free hand in the market.

“National’s policy will mostly hurt low to middle income earners in provincial cities and south and west Auckland. Wealthy people buying in the hot parts of the market in Auckland will be much less affected.

“Each per cent that the loan to value ratio (LVR) is hiked by adds $4,412 to the deposit for the average home in New Zealand, and a whopping $6,393 in Auckland, according to QV figures released only last week. A 10 per cent hike raises deposits by $44,125 across New Zealand and $63,938 across Auckland,” said Phil Twyford.

“John Key is completely out of touch. The problem for first home buyers isn’t lending, it’s the lack of affordable homes. House prices are increasing because there are too many speculators in the market and very few new homes are being built in an affordable price range,” said David Parker.

“A temporary exemption to lending limits is the responsible thing to do in the current housing market. The problem is the Government hasn’t got the mettle to take action where it’s really needed. That’s why first home buyers are going to be hurt yet again by National,” said David Parker.

ENDS

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