Government 'not giving up' on housing affordability - Ardern

February 8, 2022

Jacinda Ardern says she does not want to see home ownership slip out of reach for Kiwis.

Prime Minister Jacinda Ardern says the Government is “not giving up” on housing affordability.

Her declaration on Tuesday came after Breakfast looked at worsening inequality in housing last week.

The Government was accused of allowing inequality to grow.

Political and economic commentator Bernard Hickey claimed the Government’s policies, along with Covid-19, had seen those with assets have a “fantastic time” over the last 21 months, while renters and beneficiaries had “struggled”.

READ MORE: Rare moment Greens and National agree on NZ's housing 'challenges'

"So Covid for those people who own homes and shares has been absolutely fantastic. For those who are renters and who are on precarious incomes or maybe a benefit, it has been not just bad, but awful."

Breakfast revealed a sleep-out in Wellington, considered the fifth room of a flat, was being rented for $220 per week.

The tenant was “stoked” to have a roof over their head after applying for 55 other flats.

The show also spoke to Porirua renter Wiremu Bayliss who said owning his own home was out of reach.

In the past week Breakfast looked at how rising property values are a win for some and a loss for others.

"It's not about just the avocado on toast. It's actually sometimes the toast itself for some families.

"That ship's [home ownership] sailed for us. There's just no way we will be able to save for a house before I get to KiwiSaver, SuperGold card age.”

According to Trade Me, median rent nationwide is $560 per week.

Average house prices are also at record highs according to CoreLogic — $1,006,632.

CoreLogic’s September 2021 Housing Affordability Report found it was at its worst in 18 years, with the average property value across New Zealand 7.9 times the average annual household income.

A November 2021 report by the Ministry of Social Development found more than 60 per cent of low-income renters in New Zealand in 2018 were spending more than 40 per cent of their income just covering the rent — the worst ratio in the OECD.

An overhead view of a suburban neighbourhood.

Earlier in the show on Tuesday, host John Campbell claimed the Government had “doubled down” on its election promises.

He said Ardern in her 2017 speech had said: “This Government will make life better for renters.”

A "rent to own" scheme would be developed.

When she was re-elected in 2020 Ardern said: “A focus on housing will be a priority for this Government.

“The Government will review its housing setting with a view to implanting policies that improve access to the housing market for first home buyers.”

Asked by host Jenny-May Clarkson about what had happened to the Government’s promise of making housing affordable, Ardern said: “That hasn’t changed. That has absolutely not changed …

“We have made progress. We are not giving up. We continue to do everything that we can, pull every lever we have, whether it’s changes to tax rules, whether its supporting councils with more infrastructure in the ground, creating progressive home ownership, creating transitional housing, supporting our social services … and building more public houses than seen in the last 20 years. We are doing all of that because we need to do everything we can if we’re going to change this market.”

READ MORE: ‘Nothing off the table’ as Government looks to support renters

Ardern said the Government had limited the number of rent increases renters experienced in a year, stating it was “making an tangible difference”.

She said under Labour there had also been changes to letting fee rules and that more than 8000 places had been created in public housing, which was a “big jump” on the net decrease which existed.

Ardern said the Government had also tried to even up the playing field in the housing market, bringing in a bright-line test and interest deductibility, which was having a “significant impact”.

“I don’t think either of us would argue that we don’t want a situation where home ownership slips out of the reach of New Zealanders. I see it as something that is core to us. It gives financial stability to people, it gives them anchor to a community. This is absolutely an ambition we have but today’s first home buyers, once they are in the market, we want to ensure we don’t have a housing crash,” she said.

“Everything that we are doing we have to constantly make sure we are reaching those affordability goals for people but that we also don’t see a situation where people’s number one asset loses its value in a crash.”

Ardern concluded: “We will try everything, Jenny-May, to make it easier for whānau to get into homes.”

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