KEY POINTS:
National MP Phil Heatley has warned of the dangers of rising housing debt after a trip studying housing affordability in Britain and the United States.
"Having seen the US experience of a huge number of mortgage foreclosures, I am anxious for Kiwi families who have overstretched themselves to secure the first rung of the property ladder here.
"It would be devastating for them to face foreclosure and such a huge backward step to their ownership ambitions as in the US."
He criticised the Government's Welcome Home loan mortgage insurance scheme, saying it sent out the wrong messages.
"Debt is an important tool for entering the housing market but responsible governments should not encourage young families into unserviceable debt. Interestingly, only last year Finance Minister Michael Cullen took the banks to task for luring people into debt," Heatley said.
But Housing Minister Chris Carter asked if Heatley wanted the scheme scrapped and said it had been a big success.
"The Welcome Home loan is only available to families who can afford a mortgage and there are criteria in place to test this. Since its introduction, not a single one of the roughly 2600 families who have used the scheme have had a mortgagee sale."
Heatley, National's housing spokesman, went to the United States and Britain for a fortnight to examine housing affordability for families who do not need state housing but were locked out of home ownership by inflated property prices and state housing for those in need who were unlikely ever to own their own home.
Heatley said more land should be freed up here to push down property prices.
Carter said Housing NZ had already sought a change to the Metropolitan Urban Limit so it could start its Hobsonville project.
"But land supply is not a silver bullet," Carter said. "The property market is more complicated than that."
Carter has also looked at housing affordability measures in Britain, Canada and Australia and said he reached different conclusions from Heatley.
"Councils need sufficient regulatory authority and flexibility to incentivise developers to include a percentage of affordable housing in new developments. All three countries are well down this path. There is no point in freeing up more land if we continue to only build homes that are out of reach of first-time buyers," Carter said.
Heatley criticised state housing policy.
"The state housing situation in Britain is a warning to those here concerned about the welfare cycle. Here it is crazy enough that someone can have a state house for life even if their circumstances markedly improve and while quite desperate families languish on the waiting list" while in Britain people could pass on a house to the next generation.
But Carter said the average length of tenure for a state house here was just seven years.
HOUSING CLASH
* Phil Heatley and Chris Carter have studied international housing trends.
* Both have looked at debt, land supply and state housing.
* Heatley wants more land freed up and is concerned about debt.
* Carter defended the Welcome Home scheme and state housing policy.
* He wants developers to build cheaper housing.
