House prices: Foreigners used as 'cheap scapegoat' - Smith

Blaming foreigners for house price rises in New Zealanders was using a "cheap scape-goat" Housing Minister Nick Smith told a select committee this morning.

Labour housing spokesman Phil Twyford challenged Dr Smith on the fact the Government had no accurate figures about the extent of foreign speculators buying New Zealand houses.

Mr Twyford said it would be simple enough to get the conveyancing lawyer to certify whether the purchaser was a New Zealand resident or citizen.

Dr Smith the consistent advice was that foreign buyers were having no substantive impact on house prices in New Zealand.

He said even if such information were available, anecdotal evidence suggested that the largest group of foreing buyers were people who were planning to apply for residency.

"So if a person purchases a property and three months later are granted residency, that is no longer a foreign property, so you'd have to monitor not only what happened at the point of purchase, you'll also need to note from those million plus people that are coming and going from New Zealand what their change of status is, otherwise your numbers are rubbish."

He said Inland Revenue data suggested there had been a big increase in foreign buying between 2003 and 2008 but it was now flat-lining.

"Those people that are arguing that foreigners are at fault for our issues around housing affordability are playing the oldest political trick in the book whether it be in terms of crime or unemployment or whatever. It's always 'let's blame the foreigners.

"It's a cheap scape-goat and the reason I wont go there is because in my view it takes our attention away from the substantive things that will make a difference."

Dr Smith also revealed that the Government would pay a $6 million tax bill of a Queenstown trust which helped low-income people into affordable homes because it was deemed by the Charities Commission not to be a charity, and therefore had to pay tax.

A bill before the house would clarify the definition on a housing charity so that other similar trusts and charities such as Habitat for Humanity were not hit with tax bills.

Rebuilding Christchurch

Dr Smith said it would take until 2016 to replace the 12,000 houses that were lost during the Christchurch earthquakes.

His biggest concern in Christchurch was for homes for people to live in while 30,000 damaged houses were being repaired and the new building workforce was adding to the pressure.

The fact that so many people were staying in hotels and motels was also holding back the visitor industry, he said.

He was not interested in whether the situation was called a crisis or a challenge.

"You cannot lose 12,000 and not have huge challenges and I am far more interested in having a debate about what you do to respond to it. There is no magic wand I have to replace those 12,000 houses."

There was phenomenal pace of building going on in Christchurch.

The Government was setting up a $75 million capital fund "to get pace" around the building of temporary villages in the city.

Auckland Housing Accord

Dr Smith said he was "increasingly confident" of meeting the first-year target for consents under Housing Accord with Auckland City, of 9000 by October 1.

"My latest advice from officials is that it will be over 10,000 but there is still a power of work if we are going to be able to achieve that ramp-up to the 13,000 of year two and the 17,000 year three."

As well an accord with Christchurch City council, he was also in discussion in Bay of Plenty, Wellington and Queenstown for further accords, which he hoped to have concluded in June and July.

He also aimed to have 100 special housing areas identified before the election. There are at present 63.