Housing a key focus for National-led govt this year, PM English says; Targets KiwiSaver fees, overseas investment & trade

Prime Minister Bill English and Labour Party leader Andrew Little kicked off the Parliamentary year with exchanges on housing policy in the House of Representatives.

In tabled speech notes Tuesday afternoon, English promised to increase the supply of land for housing. Little promised to cut down on house purchases by non-residents.

English also outlined a range of policy initiatives for the National-led government this year, including increased transparency on KiwiSaver fees and a reduction in time for Overseas Investment Office applications (see more below).

In his actual address to Parliament, English said the government has a “comprehensive programme to improve the supply of housing.” He touted special housing areas, home start grants and a large-scale Crown building programme getting underway in Auckland.

He noted new policies requiring councils to take house land values into account when deciding on zoning and a NZD 1bn housing infrastructure fund currently under discussion between the government and councils nationwide.

“All of these are focussed on improving the supply of housing, and of course it takes some time for houses to get consented and built after their subdivisions have been consented and built, but we’re on the right track,” English said.

“Last year, 10,000 new houses [consented] in Auckland, because in the long-run, it is only more houses on the ground which will enable a reasonable housing market,” he said.

Labour Party leader Andrew Little responded by saying the current government had grown out of touch on house prices. Housing is the most important issue in New Zealand today, he said.

“Thousands of New Zealanders [are] still unable to afford their first home, not just in Auckland but around the country,” Little said. “It is time to have a genuinely comprehensive housing package for all New Zealanders, so that once again, all New Zealanders can genuinely hope to own their own home – at the moment a forlorn hope for too many.”

Labour will focus on removing “offshore speculators” from the housing market, Little said.

“We’re not alone in that. Six other countries party to an agreement that used to be called the TPPA – they got it, and we signed our rights away over that agreement to legislate for it; Now we’ve got it back,” Little said in relation to Trans Pacific Partnership trade deal talks having broken down after US President Donald Trump signed an order for the US to exit talks.

“Now, New Zealanders have the opportunity to seize the chance, do what’s right for the next generation,” Little said. He referred to Labour’s policy that non-residents and non-citizens should not be allowed to buy existing housing in New Zealand, but could choose to build: “if you want to live overseas and own a house, you’ve got to build a new house. What could be wrong with that?”

Labour’s policy to build 100,000 new homes of different sizes and types over 10 years, with half of them in Auckland, remains a central policy for the opposition party. “That’s what young New Zealanders are looking for,” Little said.

The Parliamentary exchanges drew heated interjections from all corners of the House. English began by praising New Zealand’s record high labour force participation rate, meaning more working age people than ever are either in work or actively looking for jobs.

The fact the rate can be burgeoned by a rising number of people looking for work but not in it was not lost on opposition MPs: “That’s because they need one [a job],” one bellowed across the House. “People can now see hope for a job,” English replied.

Little was not immune either. Talking about how New Zealand should be a country that is open to all types of people, from the government side of the house came: “even those with Chinese-sounding names?” in relation to Labour shadow housing spokesperson Phil Twyford’s 2015 release of data recording house sales to people with Chinese-sounding names.

PM Bill English's other comments from his tabled speech included:

On Housing:

Housing will remain a key focus for the Government this year, and work will continue to increase the supply of land for housing.

Legislation to reform the Resource Management Act will be progressed, to reduce costs and delays for homeowners and businesses, and the Government will also proceed with reform of the Building Act.

This year, the Productivity Commission will deliver its final report on the urban planning system. This will consider options for the long term replacement of planning legislation.

The Government will work with Auckland Council to ensure the successful implementation of the city’s unitary plan. Additional special housing areas will be established, and more underutilised Crown land will be made available to support an increase in residential building.

The Government is reforming the social housing sector to grow supply and get better outcomes for people and families most in need of housing assistance.

The Government will this year build and fund additional social and emergency housing places, having last year provided permanent funding to the emergency housing sector for the first time.

The Social Housing Reform Programme will progress this year, with the transfer of up to 2500 Housing New Zealand properties in Christchurch to Community Housing Providers. The reforms aim to drive more diverse ownership of social housing, engaging providers who can support tenants with additional social services, and redevelop social housing to better match tenants’ needs.

On Kiwisaver and financial advisors:

Regulatory changes will be made to increase transparency around fees in KiwiSaver annual statements, and legislation will also be progressed to strengthen the financial advisors regime.

On Trade and Overseas Investment:

The BGA is focussed on the six key inputs for businesses - exports, investment, innovation, skills, natural resources and infrastructure. It also captures three important cross-cutting themes – Māori economic development, sectors and regions, and regulation.

The Government will continue to support, update and implement the BGA this year.

This includes the Regional Growth programme, working with local communities to develop and implement economic growth Action Plans in Northland, Waikato, Bay of Plenty, Hawke’s Bay, Taranaki, Manawatu-Whanganui, Canterbury, Southland, Gisborne and the West Coast.

It also includes implementing the Investment Attraction Strategy to attract more high-quality foreign business investment to New Zealand.

Improvements to the Overseas Investment Office’s processes will continue, reducing the time it takes for applications to be processed while ensuring the rules are vigorously enforced.

The Government will continue to show leadership and make the case for open markets, and closer trade and economic ties. This year, the Government intends progress a range of trade negotiations, including with the European Union, the Gulf States, India and China, and complete the PACER-Plus Agreement.

The Government will work with Trans Pacific Partnership countries to explore options for advancing closer trade ties in the Asia-Pacific, including through the TPP. The Government will continue to look for opportunities to build closer economic ties with the United States, and discussions with the United Kingdom about a post-Brexit trading relationship will also be progressed.

Update includes further comments from English; response from Labour leader Andrew Little on housing:

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28 Comments

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So more of the same on housing, which is to say, absolutely nothing....

Property prices will keep trend going down, especially after March/April will be a noticeable drop in prices, 5-10%

Yes it will be interesting since the spike around march/april in 2016 accounts for much of the auckland gains in the last 12 months. Once 12 months is beyond that spike capital gains will be looking pretty small as a percentage on an annual basis, and there will be headlines saying so.

Updated with further English comments, response from Andrew Little,

Cheers

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13

Housing is a key focus for this government. The latest great step was to get rid of the Minister for Housing, so the reporters have nobody to ask pesky questions about housing. Therefore by their logic whatever happens next is now not the governments fault. Well maybe the last Labour government had something to do with it... Bill still has to talk like he cares as that is what his polling tells him. But special housing areas, releasing land, RMA reforms, selling state housing etc - this mostly now fools only those who want to be fooled.

Yes indeedy - the fake news minister - Nothing he ever said came true

"The great step was to get rid of the Minister for Housing, so the reporters had nobody to ask pesky questions about housing"

It also avoids having a minister making stupid statements that become "alternative statements" within 2 days that turn into stupid misleading lies within a short time, which in restrospect represent "fake news"

Key is going to become minister for housing - his charisma will guarantee success in the next election

Improving housing supply does not mean reduce in house prices

Yes it's simple folks, all we need to to reduce house prices and increase revenue is to introduce a Foreign Buyers Tax. Every other major city around the world has done this with remarkable effects.
GET ON WITH IT PM's!!!

Telegraph article - look who's top of the chart in over priced property, yep NZ!
http://www.telegraph.co.uk/business/2017/01/02/fears-massive-global-prop...

The next article predicted a 'Turn in the market' basically they smelt the Trump effect with China and what that could mean. i.e China really clamping down on overseas property investment.

Herald article: NZ mortgage giant warns of 'outright house price fall'
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1173...

Theresa May's government has said that they are aiming for the construction of one million new houses in Great Britain by the year 2020 ...

... on a population for population basis , that'd equate to us in NZ constructing 75 000 new houses here ...

Anyone reckon that's a goer ? ... not by 2020 .... not even in the year 2525 !

Herald article: NZ mortgage giant warns of 'outright house price fall'
This is from oct 2016 and they said it was a speculation, RBNZ has said today the rates are on hold- no increase

Bill English talking up Nationals policies and track record on housing is attempting to polish a turd...any better analogies?

I’m sick and tired of this ‘house issue’. Other than Auckland there is no issue. Take Wellington for instance, 7-8 years of prices going down Vs inflation, then last year it jumped 20%, it’ll go up another 30% in the next 2 years. So 50% in a decade, that is not a crisis, it is actually below the norm of what a usual cycle has done historically. It’s gone up 7% p.a. since the first boats arrived and it will continue to do so over the long term. My advice for anyone thinking of getting into a house and to do it ASAP. I’ve got huge respect for the youngsters out there making sacrifices, scrimping and saving like I did and getting themselves in a position to buy. Be bold and just get in, you will never regret it! To the whingers out there, you will always be underachievers through a bad attitude, so not surprisingly will continue to underachieve and blame everyone else.

" Be bold and just get in, you will never regret it!"

That is true but not for the reasons you think. The reason being house prices (read capital prices) will continue to climb until the whole financial system goes bang. With growth being dead and the financial system requiring constant debt growth, the issued debt has to pour into capital values ... until there is no return on capital and pension funds etc are bust. The alternative is for interest rates to rise but we will rapidly see no "liquidity" in the market ... ie . We are fast approaching the squeeze.

Short term thinking. The Herengracht house index suggests that there is no increasing trend in real house prices over hundreds of years, just the boom and bust cycles of irrational exuberance.

... the " reversion to mean " factor will snap house prices back to the long term inflation line ( or beneath it ) eventually ....

Only a question of when , not if ...

yes, thats it, now repeat after me... you need a house, you are unsuccessful if you don't own a house, don't invest in the productive economy, shares are scary, you'll be left behind if you don't buy a house... now drink the coolaid and mortgage yourself until you're a debt serf.

nah mate. I know a guy who has been scrimping and saving for years and kept getting outbid by 20 something foreign looking people. One day he went out, bought a boat and a new Harley.

And ... ?

and he lived happily thereafter

Property King, you are dead right.
The unaffordability of housing issue is just not in Auckland.
Housing is still very affordable in most parts of NZ so if you want to own your own then get out of Auckland.
Most,of the major cities in the world have the same problem that people,on here keep moaning about.
If they had bought in Auckland years ago rather than renting then they would not now be hoping there is a price crash.
Even if there was a price crash I doubt they would be buyers either.

Very affordable in Christchurch and improving by the month.

Housing is somewhat affordable in some places in New Zealand e.g. Invercargill if you're 30+ and earning more than $50,000; it's just that there's no jobs in those places to pay the mortgage off.

Also, how is trying to save $100,000 for a house deposit while you're earning $35,000 per annum affordable?

Actually Wildcard, most of the areas in New Zealand is doing pretty well and jobs are available. Just now I heard somebody from the east coast saying that if you are prepared to turn up five days a week, then you will have a job tomorrow. I believe that runs through all areas of skill and industry.
There persists this Auckland based idea that you can't leave because it is the only place with economic activity. Really ! Try taking a look at the Zombie suburbs of South Auckland.

Actually Wildcard, most of the areas in New Zealand is doing pretty well and jobs are available. Just now I heard somebody from the east coast saying that if you are prepared to turn up five days a week, then you will have a job tomorrow. I believe that runs through all areas of skill and industry.
There persists this Auckland based idea that you can't leave because it is the only place with economic activity. Really ! Try taking a look at the Zombie suburbs of South Auckland.

Yes Property king ......you open your speel with "I’m sick and tired of this ‘house issue" .... then finish with " Be bold and just get in, you will never regret it!"......would that be because you want to get rid of some damp. leaky, Auckland dump or dumps, at a maximum price, that you would never pay yourself? ....... your just another one of those property "vested interest" groups, with a last gasp attempt at getting rid of some of your properties...and passing the "debt" to the next generation. .

How do you propose first home buyers and recent graduates buy a house ASAP when it takes more than 10 years to save for a deposit?

Funny, seems no long ago National were denying a housing crisis. Now its top of their agenda