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Tenant generation as house prices rise - Banks

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Tenant generation as house prices rise - Banks

3News NZ

John Banks says a tenant generation will be created in New Zealand if house prices don't come down (file)

John Banks says a tenant generation will be created in New Zealand if house prices don't come down (file)

A tenant generation will be created in New Zealand if house prices don't come down, ACT leader John Banks says.

The former Auckland mayor says the average price in the city has reached $589,000 - more than 10 times the average Aucklander's income.

"It's a recipe for creating a tenant generation, the proportion of 35 to 44-year-olds renting has doubled since the mid-1990s," he said.

"If New Zealand is to offer opportunity for its younger citizens, then they must realistically be able to buy their own patch of it."

Mr Banks says unaffordable housing is creating a society of haves and have-nots.

"Only those with wealthy parents or high incomes can get into the housing market," he said.

"This is a drag on the entire economy - as Kiwis bid against each other for a limited supply of housing they must pay additional mortgage interest, reducing the amount of disposable income they have to spend elsewhere."

Mr Banks says local authorities must release new residential land because constraints are creating housing scarcity.

"Rather than restrict land, local government should be looking to make new suburbs for residential housing."

NZN

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Comments

10/07/2012 9:50:11 a.m.

Blair wrote:

Here's an idea why not buy a property in somewhere like Invercargill that way your foot is in the door for owning property. House prices here are much lower. Someone up north could buy property here rent it out and then in future years sell that house and use the gain as a deposit for a house further north. House prices here start at around $100,000 some even lower than that.

8/07/2012 7:52:53 a.m.

Mike wrote:

What has caused the higher house prices?

It is a housing shortage in Auckland and the #1 cause of the shortage apart from population growth is the RMA strangling new development. In Christchurch also a housing shortage till they get more homes built to replace the red-stickered.

We already have a capital gains tax for those illiterates who listen to the left that claim we dont. If you trade in something, be it shares, houses - anything - then the captial gain is taxable. The time for IRD to consider you a trader are set by government many years ago, maybe the current period/number of trades to be considered a trader should be shortened some?

@Barry 'low house prices, more would build'? we have the lowest interest rates that make building more affordable. This is why building a better home in the suburbs is cheaper than the average house price - this is just normal for a growing city with supply and demand. We do need more homes still which would lower prices more.

Labour was warned the RMA would strangle new housing devolpment and push home prices and rents up, but they did their ostritch act and ignored it. even now, Labour will blame National for the problem and not the RMA.

Recently was a small central Auckland room on Campbell Live expected to reach $50,000. If look at that as buy to use, that works out around $50/week for central Auckland - so unaffordable!

'Putting people' into stuff without working for them fails. Eg when Labour put returned servicemen into farms after WWII, NZ had huge numbers walk off the land - who just happened to be returned servicemen who found farming too hard to do, but since they had no money invested, walking away was easy. A farmer who put money in would stick around and work so much harder, because of their own investment. Better to have people work for stuff than be given.

We should address the problem of high house prices from the supply side so more of them lower the price and with it rental costs.

6/07/2012 8:12:08 p.m.

Aaron wrote:

John Banks, I remember you saying at an Auckland property investors meeting only 18 months ago that you like the look of the open fields and green pastures on the fringe of the city and that it would be a shame to have it all built up with housing on it. Well you can't have your cake and eat it too - as people have to live somewhere as the population naturally grows.

5/07/2012 8:23:34 p.m.

barry wrote:

high house prices are the root cause of NZs stagnant economy, low house prices mean more would build and more disposable income in the economy, its a no brainer ....

5/07/2012 3:29:13 p.m.

johnmillan wrote:

I thought Banks was walking a very slippery tight rope,over money deals?

5/07/2012 3:11:10 p.m.

Seannachie wrote:

If you want to change house prices then A Capital Gains tax to take the speculators out of it and regulating housing loans availability both as to the percentage of any such loans and the interest payable on second house purchases is required. As neither Act nor National are likely to take these steps this is just more grandstanding.

5/07/2012 1:24:20 p.m.

Anthony wrote:

Making the houses cheap is a good idea, but the real problem is that people can use the housing market as a income! Making people "Rent Slaves" to pay a landlords rent on low incomes...is not helping. Landlords should be changed to starting business to help make jobs with there money. Rather than taking all the land/housing for them self.