26 January, 2009
Bringing better balance to the housing market
Housing Minister Phil Heatley says big steps are being taken to help the many thousands of Kiwis who can't afford new homes, including changes to the Resource Management Act and Building Act.
The Minister was responding to the findings of the 2009 Demographia International Housing Affordability Survey showing New Zealand has the second most unaffordable housing, behind Australia, across 265 markets in six countries.
He said he was very conscious of the plight of existing home owners and investors who have seen the value of their properties diminish in recent months, citing lower interest rates and impending tax cuts as factors that would soften the blow.
"National understands there'll be property cycles but the recent cycle has been so extreme as to suggest there are fundamental problems with how the market is operating, notably around the supply of land."
He pointed out that it was National, when in opposition, which pushed for last year's inquiry into housing affordability. Now that National was in Government it was going to address the issue, he said.
"This research proves that many first home buyers are excluded from entering the property market by a number of factors, including restrictive zoning and consent laws, which not only make life difficult for ordinary Kiwis but are major factors in New Zealand's poor productivity and economic growth levels.
"I'm pleased to say the Government will be introducing initiatives aimed at improving housing affordability."
Along with reforms of the Resource Management Act and the Building Act, which will reduce impediments and excessive costs imposed on councils and the building industry, the Government will be:
* ensuring local councils plan for a forward supply of suitable land zoned for new housing
* making it easier to redevelop existing and unused land within city and town limits
* ensuring supporting roading and other infrastructure is provided in a more cost effective and timely manner to facilitate the growth and development of our towns and cities
* delivering sustainable resourcing for the non Government housing sector including boosting funding for the Housing Innovation Fund
* working with councils to remove planning restrictions to the development of housing on communal land and multiple-owned Maori lands. Alongside the Housing Innovation Fund we will explore ways to give banks the confidence to back such projects
* offering alternative shared ownership and financing arrangements for homeowners including the new Gateway Housing Initiative
* increasing trades-training opportunities so there are more skilled people to build and develop new houses
* establishing an Options and Advice Service provided by Housing New Zealand Corporation. This service would assist households to match their housing needs with appropriate housing solutions, both homeownership and rental.
The survey rates the housing affordability of 265 major urban markets of the United Kingdom (16 urban markets); Ireland (5); Canada (34); United States (175); Australia (27) and New Zealand (8).
The method employed in assessing housing affordability is the median multiple - where for each individual market, the median house price is divided by the gross annual median household income.
The median multiple method is recommended by the United Nations and World Bank.
For details of the survey go to http://www.demographia.com/dhi5media.pdf