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First home buyers will be shut out of market

Phil
TWYFORD
Spokesperson for Housing
David
PARKER
Spokesperson for Finance

20 August 2013 MEDIA STATEMENT
First home buyers will be shut out of market

New lending limits will be a huge blow to first home buyers, making home ownership much harder for thousands of Kiwis, said Labour’s Housing spokesperson Phil Twyford and Finance spokesperson David Parker.

“Seventy per cent of first home buyers save a deposit of less than 20 per cent to get a mortgage. Most of those will now be shut out of the market or need to save for years to come,” said Phil Twyford.

“This Government is making it harder, not easier to get a mortgage. Young people should be able to afford a first home, otherwise we will become a nation of renters. That’s why Labour has a comprehensive housing affordability package.

“John Key has to answer to first home buyers, who will be impacted across the country. His mishandled negotiations with the Reserve Bank meant there was no chance of exemptions for first home buyers.

“The Government signed an understanding with the Reserve Bank in May, but asked for an exemption only as an afterthought. The horse had bolted by then,” said Phil Twyford.

“The Government’s failure to rein in skyrocketing house prices has forced the Reserve Bank into a corner and first home buyers will be the ones carrying the can,” said David Parker

“The Government is doing nothing to address the key drivers of skyrocketing house prices – rampant property speculation and the shortage of affordable homes.

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“John Key thinks tinkering with KiwiSaver is the answer – that shows he’s out of touch. An extra $5,000 is chicken feed when an LVR increase of 10 per cent adds $60,000 to the deposit for an average Auckland home,” says David Parker.

“Bold measures are needed. Labour’s affordable housing package includes an interim exemption for first home buyers from LVRs. We will clamp down on speculation through a capital gains tax and restrict sales to overseas speculators. We will build 100,000 affordable homes over ten years and sell them to first home buyers,” said David Parker.

ENDS

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