Housing crisis: Prime Minister Jacinda Ardern wants to “tilt the playing field” toward first homebuyers

Prime Minister Jacinda Ardern addressed the housing crisis at her weekly conference that followed the formation of the government.

When asked about the housing crisis, she said the government is looking into what it can “tilt the playing field toward the first homebuyers”.

“Nobody wants to live in a country where the only way you can move into your home is if your parents can help you,” she said.

Earlier in the day, Finance Minister Grant Robertson said the government plans to tighten the screws on real estate speculators to tackle the housing crisis.

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“There is a crisis when it comes to housing New Zealand now,” said Robertson at a BNZ breakfast show in Wellington, where he pointed to housing as the focus of the 2021 budget in May.

He said, “New Zealanders see that family members are denied the opportunity to buy their own home by speculators and investors.” “We want to tilt the scale more towards first home buyers, while stimulating more investment in home construction.”

After coming to power in 2017, partly on a promise to offer more affordable housing, and KiwiBuild, the government has instead overseen continued home price inflation, which has been shipped by Covid-19, which has seen supply drop as people pile up and more money chase homes. Less.

Home prices have risen since the pandemic, with average house prices nationwide up 19 percent in December from a year earlier, in defiance of economists’ expectations of a 5-10 percent drop.

He said, “We have seen how the effects of rising demand for real estate by speculators and investors have blown those mid-year expectations of lower prices away from the water.” “The clear intention here is to take the heat out of the housing market. In the end what we’re going to see is some moderation in home prices.”

Robertson said the government will announce a tiered series of measures to address the housing crisis, beginning with moves to control demand in late February.

“We all know that building more homes, especially affordable homes, is critical,” he said. “But we can also do more to manage demand, especially from those who speculate.”

He said the government had received advice from the Treasury and Reserve Bank on measures to manage demand and discourage speculation, and the proposals would be presented to the cabinet soon. He said the advice includes new ideas and procedures already available in the toolkit.

He said that plans to improve the housing supply would be announced with the completion of the 2021 budget. He said that a “substantial amount” of an additional $ 7 billion for investment in infrastructure through 2033/34 would be earmarked for housing. This does not include transportation projects that are funded separately.

Robertson did not provide further details about the plans, but said it was time for “bold action”.

“The market has moved quickly and quickly in an unsustainable manner,” he said. “We have to face some tough decisions, and we will.”

The economy recovered faster than expected from last year’s closure. A report last week showed that the unemployment rate unexpectedly dropped to 4.9 percent in the December quarter from 5.3 percent in the September quarter as the booming construction sector compensated for weakness in areas such as tourism that were hit by the border closures.

“Our economy has recovered much better than expected, and we are in a strong position to deal with what is coming us,” said Robertson.

He said that the updated forecasts from the Treasury Department show that net debt will reach 36.5 percent of GDP in 2034/35, which is $ 60 billion less than the previous forecast in September of last year.

Robertson said he will focus on directing spending to the regions and people who need it the most, striking a balance between investing in public service and maintaining debt cover.

“With the economic recovery stronger than expected, we are seizing the opportunity to assess whether the funds can be better directed or re-prioritized where they have not actually been used,” he said.

Audio provided by RNZ.