By Jason Walls
Finance Minister Grant Robertson says he would need to see a “significant increase” in the supply of housing, particularly affordable housing, before the Government could contemplate declaring “mission accomplished” on housing.
Robertson notes some recent cooling in the Auckland housing market. On Wednesday, sales figures from Harcourts revealed average Auckland house prices had dropped to their lowest levels since April 2016.
“We have always said that moderate, sustained house price growth is likely for a period of time, rather than the big spike that we have seen. We’re by no means mission accomplished on housing, we’re still way behind in terms of supply.”
He says the fundamental issues that drove the housing crisis, such as property speculation and constrained supply, are still in play.
"We will keep an eye on the market - but I think what we saw in the housing crisis was a set of underlying issues, which is what we're focused on resolving."
So, what would mission accomplished look like?
“Making sure homeownership rates are improving, it would be making sure you get rid of homelessness, it would be improving the rental stock and the quality of that.”
Still not keen on DTI
Meanwhile, Robertson’s views on adding a debt-to-income (DTI) ratio tool to the Reserve Bank’s macro-prudential toolkit have not changed, despite recommendations from Grant Spencer.
In a speech on Tuesday, the outgoing Acting Reserve Bank Governor said this type of debt servicing ratio should be given serious consideration in the upcoming review of the Reserve Bank Act.
But Robertson says his personal view has not changed since before the election on the issue.
“I have concerns about the impact of DTI ratios on first home buyers – that remains my personal view.”
Despite this, he says this issue will be assessed in the upcoming Reserve Bank Act review and he is waiting to see what comes out of that.