Labour to announce major housing policy

Leader Andrew Little said the policy would include supply-side and demand-side measures. Photo / Mark Mitchell

The Labour Party appears set to expand its policy to build 100,000 new houses, and is not ruling out a crackdown on property speculators if in power.

The party will announce a major housing policy this weekend, which is likely to be at the heart of its election campaign next year.

Leader Andrew Little said this morning that the policy would include supply-side and demand-side measures.

"We've thought very carefully about what the needs are in terms of extra housing, extra affordable housing, extra social housing and the means to deliver that."

The details will not be revealed until Sunday, at the Labour Party's 100th anniversary event.

But the policy package appears likely to expand on Labour's Kiwibuild policy - a commitment made by previous leader David Shearer to build 100,000 affordable houses over 10 years.

"I'm not going to get into a lot of detail, but I think you will see that we taking the issue of the housing crisis in Auckland and other parts of New Zealand seriously with what we are putting up," Mr Little said.

The new policy would include "workforce measures" to make sure there were enough tradespeople to build the houses.

It would also address the huge demand for housing, especially in Auckland.

That could include limits on negative gearing, which is seen as an incentive to investment in housing.

Negative gearing takes place when a rental property cost more than it earns, meaning landlords can get a tax deduction on the loss.

Mr Little would not rule out extending the Government's "bright line test" from two years to five years.

That would mean anyone who bought a house and sold it again within five years would have to pay tax on the gains.

Mr Little said the policy package would require "modest" borrowing, but would be cost-neutral in the long-term.

He said that the Government had failed to come to grips with the magnitude and urgency of the housing problem.

"What they've turned up is a hodgepodge of ideas, fiddled and faddled around and they've got nothing meaningful."

The Government has ruled out a state-run building programme, saying that it would come up against the same problems as private developers, such as problems with consenting and land shortages.

On the demand side, it introduced the bright line test last year and says it will consider income-related restrictions on mortgages if the Reserve Bank approves them.

Prime Minister John Key announced plans on Sunday for a $1 billion infrastructure fund for councils, which will help fast-track large housing developments.

It was expected to contribute to the construction of tens of thousands of homes.

Finance Minister Bill English said this morning that this estimate was based on discussion with councils, and was not a Treasury estimate.