A Far North District Councillor is calling on the Government to reintroduce an old home -ownership bill in order to help first-home buyers get into the housing market.
FNDC councillor Felicity Foy has called time on the current housing crisis, saying the Government needs to establish a home ownership bill, such as the Family Benefit Bill of 1964, to ensure more people can get access to their first home.
"The Family Benefits (Home Ownership) Act of 1964 introduced the ability to 'capitalise' on the Family Benefit, which allowed a family to take the entire amount that would be payable for a child (until the age of 16) as a lump sum, provided they were using it to buy their first home," Foy said.
"My grandparents bought their first home in Kaingaroa using the Government-supported family benefit, which could be paid in advance and utilised as a house deposit.
"The 'family benefit' was paid to families between 1945 and the mid-1980s and many families that had very modest family incomes used this Government subsidy to get into home-ownership."
Foy said not dissimilar to today's situation, most families back then could afford to pay for a house mortgage each week, but the barrier to becoming a homeowner was often the required amount of a house deposit.
Foy said this was something the banks and central government had the power to control and change.
"The saddest part about the current housing crisis is that more houses won't get built overnight. Therefore, the situation is going to get worse before it gets any better," Foy said.
"Over the last 10 years, I have seen the cost of housing exacerbate, both for the existing housing stock and also for the cost to build.
"In 2010, houses in Kaitaia were for sale for as low as only $100,000. Now housing here in Kaitaia at its lowest price is more around the $300,000 mark.
"The cost of building has also increased so much, that on top of the land cost and on-site infrastructure, the average cost of a new build and land will now be around $700,000 (or more)."
The latest Core Logic figures confirm Foy's claims, with the average Far North home value increasing by 11.2 per cent in the final three months of 2021, reaching $751,203.
Annually, home values have increased by 35.7 per cent, well above the national average of 28.4 per cent.
Northland's residential property market more broadly continues to blaze into summer, with average home values increasing by even more in the three months to the end of December than in the previous period.
Values increased by almost as much across the Whangarei District, where the average house value increased by 8.6 per cent over the last three months and 30.2 per cent over the entire year to reach $827,836.
In Kaipara, the average home value is $906,557 – 14 per cent higher than it was three months ago and a resounding 37.7 per cent higher than the same time last year.
This comes off the back of national figures released for the last quarter of 2021 which show the average home increased in value by 7.8 per cent- up from the 6.9 per cent quarterly growth in November, with the national average value now sitting at $1,053,315.
First Home Buyers Club director Lesley Harris told RNZ Morning Report last week the current housing market was incredibly tough for people in both major cities and the provinces.
"I think we've known it for a long time ... we don't want to underplay how incredibly challenging it is. Having said that, we are still seeing people get into their first homes but there's a lot of compromises being made."
She said some of those compromises included people purchasing houses in groups, bringing in boarders and buying property in the outskirts of major centres.
"Kiwis are hellbent on getting into their first home and they will do whatever it takes to actually make that move," Harris said.
Although houses tended to be cheaper in provincial areas, the lack of high-paying job opportunities in these regions could make them an untenable option for many first home buyers.
"You've got to consider that you do have to live and earn income so generally in those provincial areas there's not as much opportunity for the higher-paying jobs so it's not as easy as it sounds.
"We're only seeing it get tougher and people are getting very frustrated."
Recent changes to the Credit Contracts and Consumer Finance Act had also made it harder for first home buyers to get a loan from the bank.
As a result, banks were now placing extra scrutiny on the spending habits of prospective first home buyers.
Harris said it was now even more important that first home buyers cleared their debts and toned down their spending prior to applying for a mortgage.
"People need to understand if you've got $9000 worth of debt, student loans are looked at differently, but $9000 worth of debt which in our recent survey was the average, is going to reduce what you can borrow by $70,000."
Last week Social Credit announced it would be calling on Kiwibank to drop its lending rates, particularly for first home buyers and small and medium businesses.
The statement said as a bank owned by all New Zealanders, Kiwibank had a responsibility to take into consideration social factors rather than simply commercial ones.
Social Credit leader Chris Leitch said the vast majority of Kiwibank customers were superannuitants, individuals, small businesses and the most vulnerable.
According to Leitch, under Kiwibank's current operating mode, its shareholders, the New Zealand Super Fund, the Accident Compensation Corporation and NZ Post were effectively taxing Kiwibank's customers to pay for their own superannuation, accident compensation, and government services through dividends from NZ Post.
He said while the Super Fund and ACC should be looking for good returns on the money they had to invest, that investment should be in shares of productive New Zealand enterprises, allowing them access to lower-cost finance for development than is available by bank borrowing.
"In the same way other commercial banks do, Kiwibank creates the money it lends to borrowers out of thin air, by simply entering digits on a computer keyboard," Leitch said.
"It does not lend money people here deposited with it, so it could easily lower its lending rates."
Leitch also held the Government accountable and said it should reverse the 2016 decision to make the Super Fund and ACC buy 45 per cent of Kiwibank and shareholding should instead be taken up by the Reserve Bank.
According to Quotable Value (QV) Operations, a flood of recent new listings had helped to dampen home value growth somewhat but had failed to stop it altogether.
QV operations manager Paul McCorry said it was fair to say 2021 had been a pretty unusual year for the property market and never in recent times had there been so much external intervention in a housing market.
He said it was also extraordinary that in the midst of a global pandemic, the market had grown by a record 28.4 per cent nationally.
"It became pretty clear towards the end of the year this level of growth was not going to continue indefinitely as we started to see a decline in the quarterly rate of growth," McCorry said.
"The most likely lever to reduce this rate going forward is to increase the Official Cash Rate (OCR), which in turn increases interest rates banks will offer to prospective homeowners."
With updated information from RNZ.