With NZ First and leader Winston Peters sitting in the “King Maker” position for forming a Government we should look at the NZ First housing policies and see what the National Party or Labour Party could adopt.
Liker many of the smaller political parties the publicised housing policy is vague and more like a statement on what Kiwis want than actual costed out policy; however there are always some things that can be discussed further.
Rt Hon Winston Peters states on the NZ First website that “All New Zealanders must have a genuine opportunity to buy their own home. New Zealand First believes that this is only achievable by government intervention with affordable housing defined by some politicians as being half a million dollars. That is not the New Zealand way and we will address this and other critical issues with the New Zealand Housing Plan.”
But then we look at the policies to see “how” they plan to achieve this.
On the NZ First website the housing policy is broken down into three areas;
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- Initiate the New Zealand Housing Plan to revamp the New Zealand housing market covering housing availability and affordability as well as rental homes supply and affordability.
- Reduce pressure on housing by slashing 72,400 foreign migrants net, who entered New Zealand over the past year with most settling in Auckland.
- Ensure that only New Zealand citizens and Permanent Residents can buy freehold land.
- Recognise that there is a housing crisis by establishing a new state agency to acquire and develop land for residential development:
- Provide first home buyers with affordable residential sections under long term low interest sale and purchase agreements of up to 25 years.
- Purchasers would build their own homes using normal bank financing, with title to the section transferred to them and the amount owing for the section, secured by a second ranking statutory land charge.
There is no mention of what the “New Zealand Housing Plan” actually is but all parties have ideas that to improve housing and make it more accessible for all Kiwis.
If you look at the current National Government they have made a lot of progress for first home buyers with KiwiSaver, HomeStart Grants and Welcome Home Loans and their housing policies announced for the election expands this more. We are seeing more help now for first home buyers than we have seen in the 20-years since I have been a mortgage broker, but the imbalance between supply and demand has seen house prices rise.
NZ First blames the house price rises on immigration and foreigners buying houses here in New Zealand and therefore their housing policy combines slashing foreign migrants and also making home ownership exclusive for New Zealand citizens and Permanent Residents. Unfortunately I think that we need foreign migrants in so many areas of the economy that this policy is only going to stall economic progress in New Zealand, but of course that will reduce demand on housing as people will be under more financial pressure – not ideal. I also do not believe that banning anyone other than New Zealand citizens and Permanent Residents is the right way to deal with overseas ownership; however I do think that there could be a levy (tax or extra rates etc) for these people. Many other countries have similar levies and something could be designed to discourage overseas owners from buying without a sound reason. Again as a mortgage broker we have arranged finance for overseas buyers, but in almost all cases those people are planning to move to New Zealand or holiday extensively in New Zealand and often also have business investment in our country. In many ways these people are contributing more to our economy than many resident Kiwis and it’s the taxes that they pay that allow Governments to provide the roads, hospitals, education, National parks and housing subsidies to all New Zealanders.
As mentioned, I believe that first home buyers are getting more help today than they ever have; however it’s still not easy to buy a home and especially the first home. We know that the cost of a house is made up of the land cost and building cost plus of course the extensive consenting costs. The current Government has been working on increasing land supply to try and fulfill demand (and therefore stabilise prices) and many would argue that this has started to work particularly in our largest two cities Christchurch and Auckland. I do think that the NZ First policy (as I interpret it) of providing long-term low interest loans for the section cost has some merit and it should be looked at to see how this could be implemented. I expect that this is not as easy as it sounds as the banks would typically hold security over the title of the land with a mortgage.
- Provide subsidies to insulate 53,000 houses ever year.
- Review building standards to ensure better building quality including earthquake and landslip resistance.
- Require compulsory and adequate insurance cover be acquired by all building owners.
- Fully monitor and enforce the terms and conditions of existing approvals by the Overseas Investment Commission for the ownership of land by non-residents.
Most of what they mention here is already being done to a lesser or greater degree.
The building standards have been reviewed a number of times and while we all want better quality houses, we are also wanting cheaper houses. I believe that there needs to be minimum standards as there already are; however I also believe that group house builders should be able to have a house design consented once rather than each and every house needing individual consent, and therefore this should instantly reduce the cost. It would also allow for factory built houses where the houses are constructed in buk
Of course those builders would need to be held responsible for their work and this may see them need to supply better and more robust external guarantees.
BETTER RENTAL STOCK
- Assist local authorities to develop aged-care housing and public rental housing projects.
- Provide accelerated deprecation for landlords to invest in energy efficient housing from insulation to HRV systems.
Winston has always pushed for whatever benefits he can get for the elderly as they make up the basis of his support so it’s not surprising that he wants more aged care facilities built; however I personally would not want these developed by local authorities. I think that there would be better ways to ensure that these are built and made available to elderly people who are in need of these.
Of course we all want more energy efficient homes but I expect that tweaking of depreciation is not going to really encourage landlords to make the changes. Most landlords will want to improve their properties if they see a financial gain from being able to increase rents or to ensure that they can find tenants. If there are enough rental properties available (supply) and demand will mean that tenants will select the better properties and this will force landlords to improve their properties. Unfortunately there is pressure to make owning rental properties not viable and this will in fact lessen supply and force rents up leaving tenants little choice.
NZ First Has Very Little Housing Policy
It’s obvious from reviewing the NZ First housing policy that either National or Labour could adopt some of the ideas.
The reality is NZ First does not have very much of a policy expect to blame the house price rises on immigration and foreigners buying houses. The expectation is neither National or Labour will be keen to back Winston Peters on his ideas on these as this will affect the wider economic policies for both parties. The Labour party have already changed their policy to allow for a KiwiBuild Visa to allow more immigrants after realising that there is a shortage of people within the building sector.
We Wait To See What Will Happen…
With NZ First and their leader Winston Peters sitting in the “King Maker” position for forming a Government we need to wait to see what is going to happen.
There are arguments for NZ First to back National and also to back Labour, but nobody really knows what Winston and his team will decide. My personal view is Winston might let National form a minority Government and stay in a position where they need to come to NZ First on each and every major decision. This will not really offer stability that the country needs, but it means Winston and his NZ First party are able to negotiate more often and effectively get more from the government. On the other hand I believe Winston would like to be acknowledged in a position of power within the Government and this may mean he will negotiate with both National and Labour to form a Government.
I expect that the housing policy adopted will be that of the party that forms the government and maybe over time some of the idea’s that NZ First have may get included. I do not think that NZ First will see any of their housing policy idea’s as essential.