State house expansion draws criticism

By ANNE GIBSON

The Government's $100 million state house expansion announced yesterday has drawn criticism from a private landlord lobby group.

Andrew King, a residential investor and president of the Auckland Property Investors' Association, said he was disappointed with the announcement of 318 new state houses to be added to the 2393 already planned in the next four years.

"One thing I had hoped that they didn't include in the Budget was increased spending for new state houses," King said yesterday. "When they re-introduced income-related rents high demand for state houses was inevitable, but the Government should not use this as an excuse to build more state houses.

"Private housing providers will always have a role to play in providing accommodation to low income earners and it would be good to see the Government working with the private sector rather than viewing them as something evil," King said.

Housing New Zealand said that it had 61,878 rental properties worth $6.9 billion at June 30 last year. Then, 11,138 people were on the waiting list and 98 per cent of tenants qualified for income-related rent.

New Zealand has about 315,000 rental houses or units, of which 230,000 are owned by the private sector and about 15,000 by local authorities.

Housing Minister Steve Maharey said in March the Budget might contain an incentive for first home buyers.

A pilot study announced yesterday to investigate helping people into their first homes was welcomed by real estate agents.

Real Estate Institute president Graeme Woodley said the $5.3 million to fund a pilot mortgage insurance scheme was a step in the right direction. "The scheme will allow those who can't get the 5 per cent to 10 per cent deposit together to be backed by the Government."