Reserve Bank bows to inevitable over new builds

new-zealand-labour-party

Tue Dec 10 2013 13:00:00 GMT+1300 (New Zealand Daylight Time)

Reserve Bank bows to inevitable over new builds

Tuesday, 10 December 2013, 11:29 am
Press Release: New Zealand Labour Party

The Reserve Bank has bowed to the inevitable today by exempting new builds from its Loan to Value Ratio lending limits, Labour’s Housing spokesperson Phil Twyford says.

“The Master Builders’ evidence that the lending limits were putting thousands of new builds at risk blew a hole in the Government’s policy of trying to increase housing supply.

“The mystery in all of this is why the Government didn’t properly think through LVRs in the first place.

“They didn’t consider the effect on new builds, the fact it would lock first home buyers out of the market, nor that it would depress already stagnant house prices in many parts of regional New Zealand.

“The Government’s housing policy is a shambles. Its chaotic management of the housing crisis has seen it effectively contract out housing policy to the Reserve Bank with no proper consideration of the effects on hardworking Kiwis trying to realise the dream of home ownership.

“Meanwhile, today’s announcement by Westpac of higher interest rates for low-deposit borrowers just confirms the existence of a two-tier home lending market.

“We now have a two tier system. The easy money goes to the well-off, and property speculators both foreign and domestic. While first home buyers who struggle to get a 20 per cent deposit together now have to cop higher interest rates.

“Westpac's home loan repayment calculator shows average Auckland home buyers on low deposit loans will now be paying over $200 more per month than those who can afford a larger deposit.

“Labour would exempt first home-buyers from LVR lending limits while our KiwiBuild programme would build 100,000 affordable starter homes, and a Capital Gains Tax would clamp down on speculators,” Phil Twyford says.

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