Lending restrictions leave workers with high housing costs

FIRST Union is welcoming the Reserve Bank’s new lending restrictions for property investors in Auckland, but believes the Government should be doing more to address the multiple issues that feed into the problem of Auckland’s housing affordability.

“Slowing house price inflation won’t solve the problem for Auckland workers, many of whom are already struggling with the high cost of housing” says FIRST Union General Secretary Robert Reid.

“Without an effort to lift wages and extend state and social housing supply workers will remain priced out of the Auckland housing market. Even if the Reserve Bank’s measures manage to cool house price inflation it will take years for wages to catch up on current trends.”

“Workers in other parts of the country are also feeling the squeeze. In Christchurch, where damaged housing stocks are driving up prices, many workers are forced to pay rent or mortgages payments which are out of step with their wages” says Reid.

“Earlier this month the average sale price for a house in Auckland passed $800,000 - over $130,000 higher than the year before. New Zealand is facing a housing crisis and it’s time for the Government to step up.”

“Government can take responsibility by providing affordable state housing for workers and lifting wages where it can instead of evicting state housing tenants” says Reid.

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