Property editor of the NZ Herald

Heat on Govt to move on housing woes

Auckland is said to have some of the most unaffordable housing in the world. Photo / NZME
Auckland is said to have some of the most unaffordable housing in the world. Photo / NZME

Housing is grabbing all the headlines lately, so the heat is on the Government to deliver on Thursday.

The sale of state houses, homelessness, the Government/Auckland Council divide over Auckland's city boundary, foreign buyers, the prospect of land tax, mortgage lending limits and rising unaffordability are all huge issues.

There's a general election on next year, so will we see big, bold, action in three days' time?

Maybe. Maybe not.

Westpac senior economists Michael Gordon and Anne Boniface say the Government is most under fire over housing.

"Consequently, we think the Government could well announce some further measures which attempt to address concerns around housing affordability, although exactly what form these measures could take is unclear," the economists said.

"Housing-related announcements in last year's Budget included funds for social housing, freeing up crown land in Auckland and a new 'bright line' test to tax capital gains from residential property," they said.

Phil Twyford, Labour's housing spokesman, has high hopes but low expectations. "I think the public want bold action on housing. If the Prime Minister is still in denial that there is a crisis, then he is completely out of touch with public feeling.

"There is growing disquiet about a generation of young Kiwi kids growing up in garages and campgrounds and the fact that Auckland has some of the most unaffordable housing the world," Twyford said.

Will a land tax be introduced?

Property expert Dean Humphries hopes instead for a stamp duty, saying it would work far better if the Government wanted more revenue.

"Stamp duty is a no-brainer and could bring in tens of millions of dollars annually. Land tax is the most draconian thing I've ever heard of."

Independent economist Shamubeel Eaqub wants more state housing from the Budget. He says doubling the state housing stock from 60,000 to about 120,000 residences would be good. But the economic commentator sees that as highly unlikely.

"This Government has shown little initiative on this front but I certainly hope housing will be big in this Budget because moves so far have been too marginal and too incremental to be effective," Eaqub said.

"To explicitly ask the Government to step in and build houses and related infrastructure flies in the face of current thinking, yet the situation is dire."

Watch: The 2016 Budget Explained

Video

Eaqub said New Zealand house prices were among the highest in the world compared with our incomes, construction was pitifully slow and prices were becoming severely unaffordable.

Because the market was not responding quickly enough, he said, he saw a big role for the Government.

He Pointed to Fletcher Building's foundations as a state house builder as an example of the positive commercial benefits.

Twyford outlined three key areas of concern.

• Home ownership:

Banning offshore speculators and launching a scheme which gets houses built. This is what Twyford says is needed. But a more modest measure such as the expansion of the HomeStart first-home buyer subsidy is all that's likely, he says.

• Healthy homes:

The Government's heat pump and insulation subsidy scheme expires this year so it would be odd if there wasn't something in the Budget on this front, Twyford says. A subsidy of clean heating measures is on the cards. Expansion of an existing scheme to refit state houses where children with rheumatic fever live is a further possibility, he predicts.

• Homelessness and state housing

A $41.1 million boost to emergency accommodation was announced in a pre-Budget move this month but Twyford says he hopes for state housing expansion.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf04 at 01 May 2017 09:26:11 Processing Time: 777ms