Prime Minister Jacinda Ardern is promising to fix New Zealand's housing crisis and has unveiled new details of her Government's state housing plan.
Prime Minister Jacinda Ardern might have dubbed 2021 the "year of the vaccine" – but she has put fixing New Zealand's housing crisis right at the top of her political to-do list.
"We can't stand by while house prices increase at the unsustainable rates we saw in 2020."
Speaking to media in Nelson during Labour's annual caucus retreat, Ardern spoke of the "urgency" needed from the Government to "tilt the field towards first home buyers".
And she said the Government would leave "no stone unturned" in its plans to fix the housing market – a market that has seen 20 per cent year-on-year price inflation.
"The current rate of housing price growth is unsustainable," she said.
"First home buyers are being shut out and rapid rises pose a risk to the long-term health of our economy."
Her housing plan would be unveiled in the coming months in a number of ways – likely cumulating in the Budget where Ardern said there would be a package to "address housing supply".
She did not reveal any details – only that there would be a boost in Government building across all types of supply, such as affordable houses.
There are a number of reasons for New Zealand's housing crisis, she said, before name-checking lack of supply, low-interest rates and the high cost of building materials.
"There is no silver bullet for fixing the housing crisis – but that is not a reason for inaction."
Ardern also said her Government would be making a number of moves when it comes to addressing the demand side issues of the market.
By late February, Finance Minister Grant Robertson would have received, and considered, advice from the Reserve Bank and the Treasury on the housing market.
Prime Minister Jacinda Ardern speaking to MPs and media in Nelson. Photo / Jason Walls
In November, Robertson asked Treasury to take a closer look at the bright-line test – a policy that means someone who sells their home within five years of buying it has to pay a tax on its capital gain.
There are a number of exceptions, such as if it's a family home.
Robertson has not ruled out extending the test, but he said he needed to wait to see what Treasury officials come up with before making a call.
This appears to be the stick for speculators – but Ardern also has a carrot which she is dangling in front of first home buyers.
In November last year, she revealed the Government was looking into adjusting the thresholds around the home-start grants to make it easier for first-time buyers to get into the market.
The home-start grant enables first-time buyers access to $5000, or $10,000 as a couple, towards their first property.
There are a number of restrictions at the moment – including an earning limit of $85,000 per person, or $130,000 for a couple.
She would not, however, go into detail about her plans for first-home buyers when talking to media today.
But she did promise to "leave no stone unturned – we're considering a range of options." Housing wasn't the only issue which Ardern focused on during the retreat.
In her opening remarks to MPs, she said that 2021 was the "year of the vaccine".
"Our job," she told MPs and ministers in the room, "is to get us through this year and to get us through the worst health and economic crisis the world has seen in our lifetime."
Prime Minister Jacinda Ardern speaks with Health Minister Andrew Little. Photo / Jason Walls
This is her Government's "top priority", she said.
