New Zealand the hardest place in the world to buy a house

The National Government’s hands-off approach to the housing crisis over the past seven years has led to New Zealand becoming the most unaffordable place in the world to buy a house, the Green Party said today.

A new report by global financial experts Fitch Ratings that includes house price to income ratios shows that New Zealanders aren’t earning enough relative to the sky-rocketing cost of housing, and that the construction sector isn’t building enough houses to meet demand.

“This report shows New Zealanders are being priced out of the housing market, or they’re having to borrow up to their eyeballs just to buy their family a place to live,” said Green Party Co-leader James Shaw.

“When average house prices are going up by more than 20 percent year on year and incomes aren’t increasing by anywhere near the same amount, this sort of problem is inevitable.

“When you have to spend huge portions of your income on your mortgage or rent it doesn’t leave a lot of room for the essentials, like feeding and clothing your family.

“Meanwhile, many working people haven’t had a decent pay rise in some time, and certainly not enough to keep up with the cost of housing.

“The Government could be doing a lot more to tackle the housing crisis – it could fund a state-sponsored house-building programme in Auckland and build the affordable homes that private construction companies won’t.

“There is also some evidence that the Government’s Bright Line tax and new tax measures for non-resident foreign speculators may have slightly cooled the Auckland housing market. However, these new regulations are just the start of what the Government should actually be doing to address the demand side of the housing crisis. The average house price in Auckland is heading towards a million dollars and that’s far too high.

“A proper capital gains tax on every property but the family home would further dampen the rampant speculation that’s happening, particularly in the Auckland market,” said Mr  Shaw.

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