Prime Minister John Key said in Parliament indications are that there is not a housing shortage in New Zealand, although there could be shortages in some parts of the country.
Answering a question from Labour Party housing spokeswoman Moana Mackey on whether the Prime Minister could confirm he did not think there was a housing shortage, Key replied, “What I can confirm is that house prices have either been falling or going sideways. And generally in a market, when there’s increased demand, prices rise.”
Made to answer the question again by Speaker Lockwood Smith after Labour raised a point of order to the first answer, Key said:
“In some parts of New Zealand there will be housing shortages, as the population increases, in others there won’t. But overall, prices have either been falling or staying the same which doesn’t indicate a shortage.”
Labour leader Phil Goff then asked Key if he could confirm new housing starts were at their lowest point in 45 years, and that consequently the Master Builders Federation was predicting a major housing crisis within the next 18 months?
Goff said yesterday he thought Auckland was in danger of a housing crisis due to recent low levels of building consents and skilled labour moving offshore. See more here in yesterday’s article.
Key said Goff’s first point was right.
“And that indicates that there isn’t an overwhelming demand for housing at the moment. If there was, of course, there would be people piling in.”
“I think that reflects actually what’s happening is that the Government’s policies are actually working, which is, we are rebalancing the economy away from one that’s solely driven by housing, into one that has a more diversified investment portfolio,” he said.
Key said earlier in Question Time there were two things that made a “fundamental difference” for someone wanting to buy a house.
“The first is after-tax income, and this government has cut taxes – so after tax income has risen. Second thing is getting inflation under control – this government has got control of inflation, therefore interest rates have stayed low,” Key said.
“So they are all the reasons why New Zealanders can get into a home,” he said.
“The third thing is actually this government hasn’t focused on building new state homes. What the Government has focused on is getting more people into those homes and that’s why we’ve a number of policies which have made a difference in that area.”
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