16 MAY 2018
FOR IMMEDIATE RELEASE
The Government's plans to provide interest free mortgages to low income, first home buyers is the sort of nutty government intervention which led to the GFC, says the New Zealand Taxpayers’ Union.
Taxpayers’ Union Executive Director Jordan Williams says, “This scheme is a New Zealand version of Fannie Mae and Freddie Mac in the United States - a taxpayer-funded scheme to get people onto mortgages they can ill afford.
"The United States tried these kinds of policies to increase home ownership rates in low income communities prior to the Global Financial Crisis, with disastrous effects. If there’s a market downturn and homeowners lose their jobs, the Government is left with very large debts, backed by houses worth very little.”
“In the immediate term, this policy would make housing affordability worse. This policy uses taxpayer money to subsidise people entering the housing market, which increases pressure on prices.”
“If the Government wants to get more people into homes, the solution is to eliminate red tape and open up more land for housing construction, not throw taxpayer money at the problem.”