In the weeks between now and the general election, we’ll be looking at the issues dominating the debate. These primers will be updated as policies are announced.
Housing affordability couldn’t not be an election issue – the fact that the Kiwi quarter-acre dream seems inaccessible to so many people makes it a bone of contention for opposition campaigns.
At the end of June, a Massey University study found that home affordability had fallen by 7.6 per cent compared with the same period a year ago, meaning it is considerably more difficult for people to acquire a first home. Unsurprisingly, Auckland was the least affordable region, while the pickings are apparently better in Southland. The study’s co-author Professor Bob Hargreaves said a striking trend was the widening affordability gap between cities and provincial towns.
It has, as The Wireless’ Elle Hunt pointed out last year, never been easy to buy a house. But it’s especially difficult since the Reserve Bank tightened lending restrictions. (The Bank has indicated it will keep increasing the benchmark borrowing rate throughout the rest of the year.)
The Government has been under pressure on housing, writes Radio New Zealand’s Jane Patterson, though no one party seems to have pulled ahead on the issue. “If interest rates continue to rise and migration spikes in the lead-up to the election, there is only going to be more pressure on the two main parties, in particular, to convince voters they have the answer to New Zealand's housing woes.”
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At the end of May party leader David Cunliffe criticised the Government’s “itsy-bitsy housing policy” as an inadequate response to foreign buyers and speculators’ pushing up prices. But Housing Minister Nick Smith says foreign buyers are having no substantive impact on house prices.
There’s also the debate over a capital gains tax, which would see people pay tax on the profit made when they sell a property – thus discouraging speculation in an already expensive market. Labour and the Green Party are in favour of a new tax as a step towards making home ownership accessible, but National says New Zealand already effectively has a tax on capital gains.
Meanwhile, United Future says it will to allow people to get their Working For Families entitlement in one lump sum to help build up a deposit to buy a house.
If the question over affordability is largely centred on Auckland, Christchurch has its own problems. Since the earthquakes, the availability of safe and comfortable housing has been an ongoing political football. The Press reports that “data from MBIE and the 2013 census suggests that 11,500 homes were lost in the earthquakes, overcrowding increased and the number of temporary dwellings also rose.”
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The National Party says it will build eight to ten thousand new homes in the city in the next five years. But it has been criticised over the pace of the rebuild so far, with Poto Williams, Labour’s MP for Christchurch East, saying the Government is failing to fulfil its commitment to the city.
Not everyone can actually afford to own their own homes, and supply and quality of rental housing is also under discussion. The Herald reported in July that only ACT and the Conservative Party oppose introducing a general ‘warrant of fitness’ for rental properties. In a trial scheme run by the University of Otago, of the 144 council and privately-owned properties in five cities inspected, 94 per cent failed at least one of the 31 criteria on the checklist.
The country’s homes are, the OECD has said, the most overvalued in the developed world. That has effects for banks’ homeowners, landlords and renters and of course, the government. A roof over one’s head is a basic need – that, most people can agree on.
If you’d like to see some of the parties’ policies, you can find them here: National Party; Labour Party; New Zealand First; Mana; Maori Party; Green Party; United Future; ACT Party; Conservative Party and the Internet Party.