Thousands of heavily-mortgaged first home buyers in Auckland could be hit hard by rising interest rates, thanks to out of control house prices, according to documents released to the Green Party under the Official Information Act.
An email from Reserve Bank analysts to senior Beehive staff in January 2017, titled “response to PM’s questions”, highlights a “significant likelihood of financial distress” for people who have recently got mortgages in Auckland, in the event interest rates rise as predicted.
A capital gains tax on property speculators is urgently needed to rebalance the housing market, as the median nationwide house price rose to over half a million dollars today, the Green Party said.
“New Zealand under National has become a housing speculator’s paradise, and normal working families are paying the price,” said Green Party Co-leader James Shaw.
Reports that Housing New Zealand is about to run out of money, just as it’s supposed to be building new houses to alleviate the housing crisis, is a symptom of National’s economic mismanagement, the Green Party said today.
“Bill English has run Housing New Zealand into the ground and now he’s going to have to do an emergency bail-out,” Green Party Co-leader James Shaw said.
Auckland housing is unaffordable and a responsible Government would have a sensible plan to reduce house prices over time, while protecting families with mortgages, the Green Party said today.
Data released today by the Reserve Bank confirms that National continues to let property speculators drive the housing market, hurting first home buyers, the Green Party said.
New Reserve Bank mortgage lending data shows that in June, property investors borrowed $2.56 billion while first home buyers borrowed less than a third of that, just $738 million. Investors took out over 7,000 new mortgage loans in June, compared to only 1,970 mortgages for first home buyers.
Nick Smith’s next step must be action to fix the housing crisis, now he’s accepted that Auckland is unaffordable for first home buyers, the Green Party said.
“New Zealand has gone through the five stages of grief in the housing crisis, and now that the Building and Housing Minister has reached the fifth stage – acceptance – it’s time for him to take action,” Green Party finance spokesperson Julie Anne Genter said.
The Government’s backdown on forcing Housing New Zealand (HNZ) to pay a multimillion-dollar dividend shows that the Government can take measures to help end the housing crisis if it really wants to, the Green Party said today.
Comments by the Reserve Bank today that the Government should consider ‘further reducing the tax advantage of investing in residential housing’ highlight that the Government could be doing much more to fix the housing crisis, the Green Party said.
“John Key said earlier this week the Reserve Bank should ‘get on’ with fixing the housing crisis, but the Bank has put the spotlight back on the National Government’s inaction,” Green Party finance spokesperson Julie Anne Genter said.
The National Government is still the property speculator’s best friend, Green Party said today.
Mortgage lending data released today by the Reserve Bank shows that residential property investors are borrowing more than three times as much as first home buyers.
“Under the National Government, it’s clearly still much easier to buy a third, fourth, or fifth investment house, rather than your first home to live in,” Green Party Co-leader Metiria Turei said.