Key’s LVR numbers wide of the mark

new-zealand-labour-party

Tue Oct 01 2013 13:00:00 GMT+1300 (New Zealand Daylight Time)

Key’s LVR numbers wide of the mark

Tuesday, 1 October 2013, 12:45 pm
Press Release: New Zealand Labour Party

John Key is trying to scare Kiwis with claims that thousands of dollars will be added to mortgages, but the problem is his numbers are totally different from the Reserve Bank’s estimates, Labour Leader David Cunliffe says.

“The Reserve Bank Governor has said loan to value ratios (LVRs)[1] would reduce interest rates by ‘about 30 basis points’[2]. But yesterday John Key claimed the reduction would be ’about 50 basis points’.[3]

“The difference adds around $15,000 to the cost of the average mortgage. Either John Key is scaremongering or he got it wrong.

“If he is trying to frighten New Zealanders it’s because he is desperate to limit the fallout from LVRs. He knows Kiwis don’t think it’s fair to shut first home buyers out of the market.

“If Mr Key just got his numbers wrong it’s even worse. If he had been out by 20 basis points at Merrill Lynch it would have cost the company billions of dollars and he would have been fired. New Zealanders should consider a similar response.

“The truth is that the Kiwi home ownership dream is disappearing under National. Instead the Government is creating a generation of renters.

“That’s because National doesn’t have the courage to deal with the real drivers of skyrocketing house prices – rampant speculation and the shortage of affordable homes.

“Labour has a smart, innovative plan to keep housing affordable. We will build 100,000 affordable homes to increase supply and crack down on speculators.

“Labour will also insist on a temporary exemption for first home buyers from LVRs and ensure lending limits are targeted to areas with high house price inflation,” says David Cunliffe.

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