Finance Minister’s speech on housing affordability

“Twenty-five years ago, around 30 per cent of new homes coming into the market were priced in the lowest quartile. Another 30 per cent of new homes were priced in the upper quartile.

Today, only 5 per cent of new homes are priced in the lowest quartile. Nearly 60 per cent of new homes are priced in the upper quartile.

The new supply of lower-priced, affordable housing has dried up.

There are parts of Auckland where no new houses are entering the market priced at the affordable end of the market.

It is not surprising to see prices and rents rising disproportionately at the bottom end given this lack of supply.”

“As households have the proportion of their income spent on housing grow, the political pressure goes on governments to fill the gaps.

Today we spend $2 billion each year on accommodation subsidies. 60 per cent of all rentals in New Zealand are subsidised by the Government.

The state owns around $21 billion worth of houses.

One house in every 16 in Auckland is a Housing New Zealand property.

Many of these are three bedroom houses on quarter-acre sections only a few kilometres from the CBD – a massive misuse of scarce land. And all at the taxpayer’s expense.

So these are the reasons why the Government pays attention to the housing market and issues stemming from poor planning.”

Read more of the Minister’s speech here.