The Green Party is calling for bold, transformational measures to stop the accelerating housing crisis that is locking New Zealanders out of a stable home.
- Removing tax incentives for investors by removing the five year cap for the bright line test.
- Regulating investors’ access to mortgages, including
- Ending interest-only mortgages,
- Putting restrictions on debt to income ratios, especially for investment properties,
- Requiring cash deposits for mortgages on investment properties, not just equity from other homes.
- Direct economic stimulus from the Government in the form of income support, instead of relying on the Reserve Bank.
- A massive urban redevelopment and home building programme led by Kāinga Ora, until supply matches demand and prices stabilise at affordable levels.
“Everyone has the right to a decent, affordable home, but house prices are out of control. Auckland’s median house price increased by $100,000 in February alone,” Green Party Finance spokesperson Julie Anne Genter said today.
“The housing announcements we’re anticipating from the Government soon need to meet the scale of the problem. We need to ask ourselves what would actually make a serious difference to address the instability of the housing crisis which is increasingly leaving New Zealanders behind.
“We are calling for bold, urgent interventions in the housing market, including building thousands more homes and dampening down investor speculation. We must use all the tools in the toolbox to stop the accelerating housing crisis in its tracks, failure to do so will mean things only keep getting worse.
“The Green Party urges the Government to remove the five year cap for the bright line test. In other words, anyone selling a residential investment property that is not their primary home should have to pay tax on the profits. Any cap extension, to ten or 15 years for example, just kicks the can down the road a few years, while property investors will hold on to their properties until the day after the bright line test is over.
“The Government must empower the Reserve Bank with new tools to urgently address the boom in lending to investors, who are shutting first home buyers out of the market. If the Bank doesn’t use them, then the Government needs to step in with ministerial direction under the Reserve Bank Act, or even legislation.
“Debt to income ratios should be allowed and used to slow down the highly leveraged, risky mortgages that underpin housing speculation. New requirements for property investors to actually have saved a cash deposit, rather than leveraging equity in other properties, would help level the playing field with first home buyers. The Reserve Bank should be asked to limit interest-only mortgages, which exposes that many investors never even aim to pay off their principal debt until they flick a property on for massive capital gain.
“Government building must step up too. Kāinga Ora needs to be properly supported to acquire land and redevelop it into thriving and accessible communities, with affordable homes, green spaces, and clean transport links. That means increasing Kāinga Ora’s debt limit, and working with Community Housing Providers and iwi to build more long term rental homes and papakāinga housing.
“Kāinga Ora should be aiming for at least 5,000 new builds every year until supply matches demand and prices stabilise at affordable levels. After that, it should be mandated to maintain a constant pipeline of housing development to match expected population increases.
“We must act boldly, and quickly, to address this crisis. The time to do something substantial to change the course we are on is now”.