KiwiBuild reset potentially dangerous
FOR IMMEDIATE RELEASE
Replacing KiwiBuild with easy credit policies for first home buyers places significant risk on taxpayers, says the New Zealand Taxpayers’ Union.
Taxpayers’ Union Economist Joe Ascroft says “The American housing crash and ensuing Global Financial Crisis was driven in part by the American Government’s decision to offer subsidized mortgages to low income households, who then failed to meet debt repayments when interest rates increased. Our Government’s decision to adopt a similar approach by offering taxpayer-backed mortgages to households who can only scrape together a 5 percent deposit is an uncomfortable echo to those easy credit policies which induced a housing crash overseas.”
“If households on ultra-low deposits ever failed to meet repayments due to rising unemployment or interest rates, either taxpayers or the banking system would be put under significant pressure.”
“Of course, the best approach to housing unaffordability isn’t to load on more debt and subsidies – which will inevitably push housing prices higher – but to enact meaningful supply-side reform. Allowing our cities to become more dense and removing the rural-urban boundary would be good places to start.”