Phil Twyford
Housing Spokesperson

14 October 2013

Fewer first home buyers in market due to LVRs

First time buyers have been hammered by the new mortgage lending restrictions according to the BNZ-REINZ market survey that shows for its first time ever there are fewer first home hunters in the market, says Labour's housing spokesperson Phil Twyford.

Mr Twyford said the survey results offered the first clear evidence that the LVR lending limits that have imposed 20 per cent minimum deposits for many lenders are beginning to bite.

"BNZ economist Tony Alexander says there has been a collapse in market interest by first home buyers, with 41 per cent of real estate agents seeing fewer first home buyers. That’s the lowest since the survey began.

"It is clear first home buyers are paying the price of the Government's mishandling of the housing crisis. They have been forced out of the market, giving speculators a free hand.

“In addition new REINZ data out today shows that just five per cent of house price growth occurred outside Auckland and Christchurch yet LVRs apply to the whole country. That doesn’t make sense. Provincial New Zealand is being hurt by a policy that is trying to solve a problem that exists only in Auckland and Christchurch.

"Labour wants New Zealand to be a nation of home owners. National wants a nation of landlords and property speculators.

"So in spite of John Key's crocodile tears back in June when he talked about a carve out from the lending restrictions for first home buyers, a full month after the Government had signed off the agreement with the Reserve Bank paving the way for these tools to be used, this policy is hammering first home buyers, the very people the Government should be looking after.

"The Government's housing policy is in tatters. Interest rates are going up, Government agencies are referring people to live in campgrounds, and now there is evidence that first home buyers are being shut out of the market.

"Labour would temporarily exempt first home buyers from the LVR lending limits, while we ramp up the KiwiBuild programme to build 100,000 affordable starter homes, and while we implement a Capital Gains Tax excluding the family home,” said Phil Twyford.

ENDS

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