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Budget figures show deepening housing crisis

David Cunliffe
Labour Leader

16 May 2014

Budget figures show deepening housing crisis

Treasury projections in the Budget predict worsening housing affordability and rising interest rates outstripping wage increases, underlining National’s abject failure to address the housing crisis, says Labour Leader David Cunliffe.

“Within five years, it will cost 63 per cent of the average full time wage to service an 80 per cent mortgage on an average home. Right now, it costs 49 per cent of the average full time wage.

“By failing to announce anything that will tackle the housing crisis, National has lit the fuse on a time bomb.

“These projections guarantee that home ownership rates will continue to fall, and a generation of young New Zealanders can kiss goodbye to the Kiwi dream of home ownership.

“Budget projections show the average Kiwi will gain around $2,600 a year in real wages, about $1,800 after tax. Real mortgage payments are slated to go up by around $2,900 over the same period based on Treasury’s data.

“Rising housing costs will hollow out household incomes in middle New Zealand, and drive struggling families deeper into poverty.

“This crisis is also being driven by surging migration figures. Tinkering with tariff duties and planning rules is nowhere near enough.

“National might be willing to sit on its hands while home ownership becomes a distant dream but Labour is not.

“The Labour-led Government I lead will build 100,000 affordable starter homes, will implement a Capital Gains Tax to take the speculative heat out of the market, put a stop to offshore speculators bidding up prices, and give the Reserve Bank the option of raising savings rates rather than interest rates.

“Affordable housing is a top priority for New Zealanders and will be so for the incoming Labour-led government,” says David Cunliffe.

ENDS

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