7 July 2016

Reserve Bank hits housing crisis ball back into National’s court

Comments by the Reserve Bank today that the Government should consider ‘further reducing the tax advantage of investing in residential housing’ highlight that the Government could be doing much more to fix the housing crisis, the Green Party said.

“John Key said earlier this week the Reserve Bank should ‘get on’ with fixing the housing crisis, but the Bank has put the spotlight back on the National Government’s inaction,” Green Party finance spokesperson Julie Anne Genter said.

“When the Reserve Bank says ‘a broad policy response is needed’ it’s pretty clear the Bank wants the Government to do more to help.

“National’s preference for leaving the housing crisis to the Reserve Bank to fix isn’t working, and the Government needs to take stronger action.

“National has completely failed to deal with runaway house prices. The Reserve Bank can only do so much to help clean up the mess.

“Tax advantages for property speculators have unbalanced our economy, leading to too much money being tied up in the housing market, instead of being available to invest in business expansion and job creation.

“We know that property investors are borrowing three times as much as first home buyers, so dampening housing speculation will create room for more families to buy their first homes.

“We need a proper capital gains tax (excluding the family home), a government-led home building programme, and better planning rules to encourage affordable housing around key transport routes,” said Ms Genter.

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