We all know there's a housing crisis in New Zealand today. As Jacinda and I travel the country, it's the number one issue people raise in our public meetings.

I've been to overcrowded houses in Mt Roskill, I've met a woman who is the last resident in a Hamilton state housing community, and talked to countless young people who just want a fair shot at the Kiwi dream. Everyone wants to know how we can fix this.

There's no magic bullet but Labour has been rolling out a set of policies that, together, will start to fix the housing crisis.

We'll build homes people can afford to buy and sell them to first home buyers at cost. We'll crack down on speculators who jack up prices. We support families in need.

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Last weekend, I announced the third part of our plan to tackle speculators and let home buyers have a fair go.

As well as banning overseas speculators and making speculators who flip houses within five years pay tax, we'll close a loophole that lets speculators avoid $150m of tax each year.

We'll invest the savings into grants for homeowners and landlords to spend on insulation and heating.

It's common sense. Taxpayers shouldn't be subsidising speculators and helping them outbid home buyers. In recent weeks, the IMF, the OECD, and the Reserve Bank have all called for the loophole to be closed because it's fuelling the housing bubble.

Even the Property Investor Federation admits "Yes, the investor has an advantage" over a home buyer thanks to this loophole. So, let's close it and put the money into something worthwhile - making homes warm and healthy.

Naturally, the property lobbyists and others who make money off housing bubbles are predicting doom if speculators lose this taxpayer hand-out. It's their job to say things like that, after all. But their claims don't stack up.

The shortage of rentals won't worsen. If a speculator sells their houses and people buy them - then there's no change in the balance of supply and demand.

There's fewer rentals but equally fewer people needing them because they're now homeowners, which is a great outcome!

Plus, we're going to be building affordable homes for people to buy, which will reduce pressure in the rental market.

And speculators don't really add to the supply of housing. In Australia, only 5 per cent of residential investments are in new builds, the other 95 per cent are for existing properties.

We all know that most rentals are not new houses; they are former family homes that get converted to rentals.

Because the balance of supply and demand will get better, not worse, rents won't rise. If anything, I hope they fall.

We heard the same scaremongering about rents when depreciation was removed and when insulation standards were established. It's really just stand-over tactics and hollow threats.

Now, they will say that people can offset other losses against their income, and that's true. But everyone knows houses aren't like any other asset.

Everyone needs somewhere to live. Speculators aren't just competing against other businesses, they're competing against families.

Every speculator who uses this loophole to help them outbid a young couple trying to buy their first home is denying a family a home so they can make a profit. We need to create a level playing field for home buyers.

If that means speculating on housing is less attractive, well that's exactly what the IMF says needs to happen: "limitations to subtract negative gearing losses from other income sources, would reduce incentives for leveraged real estate investments by households and help redirect saving incentives to other, potentially more productive investments".

In other words, less money into the housing bubble, more money into investments that actually create jobs and wealth - that's great!

Lastly, they claim "mum and dad" investors will be hit. The figures say otherwise. Eighty per cent of the tax avoided goes to people in the top 30 per cent of incomes.

The Property Investors Federation admits most one-property investors only use the loophole for a few years after purchasing a property.

So, long-term investors aren't hurt. The small number of 'mum and dad' investors who are using the loophole will have five years to adjust as we phase it out.

It is not surprising property lobbyists are scaremongering.

Removing this loophole gives home buyers a level playing field and gives the Government the money to invest in healthier homes.

• Andrew Little is leader of the Labour Party.