Order Paper and questions
Questions for oral answer
2. Housing, Affordable—Market Stability and Land Supply Policies
[Sitting date: 27 August 2013. Volume:693;Page:12935. Text is incorporated into the Bound Volume.]
2. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: What measures is the Government taking to help prevent a repeat of the damaging housing bubble that contributed to significant economic imbalances in New Zealand in the mid-2000s?
Hon BILL ENGLISH (Minister of Finance) : In the period between 2001 and 2007, house prices in New Zealand doubled, and the export sector went into recession in the middle of what was actually a global economic boom. As is now widely accepted, housing supply constraints are one of the major causes of housing bubbles. That is why the Government is working with the Auckland and Christchurch city councils to increase greenfields and brownfields land supply, reduce the delays, costs and uncertainties of the Resource Management Act, improve infrastructure provision, and look to improve the productivity in the construction sector. The Government is giving effect to these through the special housing areas legislation, and two Resource Management Act reform bills this year, and we look forward to the Opposition support for these pieces of legislation, which improve housing affordability.
Peseta Sam Lotu-Iiga: What effect does the Government expect these measures to have on housing supply, and what additional steps is the Government taking to directly support first-home buyers?
Hon BILL ENGLISH: The Government and the Auckland Council have a common objective of more affordable housing, and have therefore agreed to the Auckland Housing Accord and to introduce supporting legislation to deliver fast tracking of consents in less affordable areas. The Auckland accord targets 39,000 housing consents over the next 3 years. This is up from fewer than 12,000 over the last 3 years. We expect that this will have some effect in slowing the rate of increase in house prices, because ideally we would like to see wages rise at least as fast as house prices so that houses can become more affordable. This is in addition to the Government’s recently announced moves to support first-home buyers.
Peseta Sam Lotu-Iiga: What reports has he seen on Resource Management Act changes that are cutting red tape and freeing up land supply, and why does this matter for the cost of housing?
Hon BILL ENGLISH: I have seen reports that say the Government’s Resource Management Act changes will give homeowners and developers the certainty and the confidence that they need to proceed with more investment in more houses on the ground at a time when we need them in order to slow down the rapid rise in house prices. I have seen one report that the cost of waiting for building and resource consents to be processed is between $1,000 and $1,600 per house, per week. That is money that must be recovered from the sale price, and directly contributes to making houses less affordable. That is why there is broad support, except from the Opposition, for the Government’s changes to resource management legislation to reduce the number of weeks, because every week we can reduce the length of that process, we can save prospective homeowners between $1,000 and $1,600.
Peseta Sam Lotu-Iiga: What alternative housing policies has he seen?
Hon BILL ENGLISH: Land is around 60 percent of the cost of a house in Auckland, so it would be ridiculous for any housing affordability policy to fail to include a mechanism for delivering lower land prices. I have seen one of these policies. It does not talk about land supply, or infrastructure, or red tape, or construction sector productivity, and it is the Labour policy, backed by three of its leaders so far and no doubt will be backed by the next one.
Hon David Parker: I raise a point of order, Mr Speaker. If you are going to allow the Minister of Finance to quote Labour Party policy, could you ensure that he at least gets it right?
Mr SPEAKER: I appreciate the point the member is making, but it is not actually a point of order.