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Govt must act before Reserve Bank forced to

David Parker
Finance spokesperson

Phil Twyford
Housing spokesperson

4 June 2014

Govt must act before Reserve Bank forced to

The Government must take much stronger action on the housing crisis before the Reserve Bank is forced to act on its consideration of a cap on mortgage lending, says Labour’s Finance spokesperson David Parker and Housing spokesperson Phil Twyford.

“The Reserve Bank has refused to rule out capping mortgages, possibly to 4.5 times a household income, if house prices continue to skyrocket,” says Phil Twyford.

“This could mean an Auckland family on a median income subject to an 80 per cent LVR could only buy a home of around $400,000, over $200,000 less than the median price of an Auckland home.

“That would shut out many more of the first home buyers who weren’t already locked out by LVRs, creating a generation of renters.

“Not only would it be the end of the home ownership dream it would be a speculator’s nirvana.

“Increasingly under National the only people who can afford to buy homes are the already well-off, speculators and those with wealthy parents.

“If the Reserve Bank chooses cap mortgage rates it will be the Government’s fault because it has not taken the actions necessary to address both speculator-driven demand and the shortage of affordable houses.

“This is exactly what happened with LVRs. The Reserve Bank was forced into a corner by the Government’s inaction. It’s déjà vu all over again,” says Phil Twyford.

“National must stop denying the housing crisis and pretending that its housing accord, which has yet to produce a single house, will solve anything,” says David Parker

“Labour has a comprehensive plan to make housing more affordable. We will build 100,000 affordable homes, clamp down on overseas and domestic speculators and lower interest rates through our Reserve Bank upgrade.

“National’s refusal to deal with housing, capital gains, universal KiwiSaver, migration effects and monetary policy is hurting first home buyers and the wider economy.

“Only Labour can solve the housing crisis,” says David Parker.

ENDS

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