Two of Parliament's youngest MPs, Labour's Jacinda Ardern and National's Nikki Kaye, begin a weekly blog for nzherald.co.nz today. We ask them what can be done to make homes more affordable for first-time buyers?
JACINDA ARDERN
I need to start with a personal confession: I am a failed homebuyer.
I'm not sure at what point I earned that title. Was it when I stood at what felt like my twentieth auction and watched the asking price fly past me yet again? Or perhaps that moment when I called a real estate agent to place my life savings on a box with 'charm and potential' only to have the agent awkwardly ask "did you miss out a zero?"
But long before I failed, successive Governments did.
The signs were all there. In the 1990s, half of all 25 to 29 year olds owned a home. By 2006 this had dropped by 17 per cent. There were a couple of contributing factors, and housing affordability is right up there. Around 27 per cent of households are spending more than a third of their income on housing costs - up from 11 per cent just two decades ago.
How did we get to this place? Well for one, there just aren't enough houses, particularly in Auckland where we need to build 27 per day to keep up with demand. Local government and our planning regulations have been left wanting in the face of this growth. Sure, we've squashed in a bit of infill housing, but rather than encourage liveable dense housing, we built a city of tiny and often poor quality apartments with little to no green space to speak of (a forest-green public toilet doesn't count).
It would be unfair not to look to central government too though. Both teams have dabbled around the edges of this issue. Labour made a good start when it was in Government through policies like Welcome Home Loans and Kiwisaver. This superannuation scheme not only gives you a $1000 kick-start, it also allows you to withdraw up to $10,000 towards a deposit on your first home.
The current National Government had a go too. In the last budget, it changed the rules for landlords claiming depreciation against their rental properties. Unfortunately, this just led them to pass on the cost to their tenants; people renting in central Auckland (about 40 per cent of all residents) are now paying on average $20 extra a week. In twitter speak, that policy would earn the hash tag #EpicFail.
It's not too late though. We can turn this ship around and still hang onto our home ownership dreams. It's just going to take a bit of courage.
First, we need to change the fact that, for handful of Kiwis, owning multiple houses is not only a source of income, it's a tool to avoid paying income tax. This has a flow on effect for supply and first homebuyers. We have to address this issue: it's politically hard, but the right thing to do.
Second, we need to build more houses. The Government has a role to play here: they need to start investing in more affordable housing for low income families who are currently squeezed into inhabitable spaces, rather than their current policy of selling what little stock we have.
And finally, we need planning regulations that encourage our cities to grow up, not out and keep in mind that we're housing people and communities, not cattle.
I can accept being a failed homebuyer, but I can't accept that inaction by Government is putting thousands of people who desperately want a decent start and a decent house in the same position.
It's time for some action.
Jacinda Ardern is on Twitter: @jacindaardern
NIKKI KAYE
For many young Kiwis the dream of owning a house seems a long way off.