Housing war will decide election


By Duncan Garner, RadioLIVE Drive host  

The gloves are off in the housing scrap – and first blood goes to Labour’s new leader David Cunliffe.

By saying he will reverse the Reserve Bank’s requirement for 20% home loan deposits, he’s got first home buyers listening. He’s stolen the march.

National’s missed the boat; it’s now playing catch-up.

To afford the average house in Auckland, buyers will from today need a 20% deposit. That’s $130k. Who on earth has that? How many first home buyers have that? Bugger all.

Cunliffe says he’d reverse that requirement.

John Key says the Reserve Bank told him making such exceptions and exemptions for first home buyers will lead to higher interest rates. That may be the case, but that’s the fine print for most home buyers. They are likely to only hear Cunliffe’s promise to repeal – not the bad bit.

National has today released a policy promising people in the regions that they can buy their state house. They will get a subsidy of up to $20k from the Government to do so. That’s great; it’s pretty generous too.

But these houses are in places where there is no problem, low demand and even fewer jobs: Waimate, Gore, and Invercargill.

Plus, in some towns only one house is on offer. This picks 400 winners. Good for them. But the problem lies in the north. So Cunliffe has stolen the march in the home buying war.

He is articulate. And people are just starting to listen again after years of the phone being off the hook for Labour.

Truth is Labour let house prices double between 1999 and 2008, and power prices went up 72% in the same period. But that was then and this is now. They got kicked out of Government and now National faces a similar problem.

National looks like it has been sleeping on the job. And it has.

It’s woken up now, but is it too late?

Cunliffe looks like he wants to help first home buyers. He’s boldly saying he will intervene in the Reserve Bank’s operations. You can say that from the safety of opposition: It’s big and bold.

In Government – you deal with reality.

The reality is the only affordable houses in Auckland are in the deep south – and way out west. But both locations have been seen as undesirable for decades.

If politicians were really honest they’d say buyers need to lower their expectations – live in a suburb they might not like for a few years – do some renovations, and work your way up. Instead they’re all claiming they’ve got some answers.

But this is the brutal reality: If you’re looking within 12 kilometres of Auckland City the horse has bolted. House prices have sky-rocketed and won’t go backwards.

If you’re outside of Auckland you’re being punished for the Auckland bubble.

If you want an affordable home in Auckland, best you buy in South Auckland – or the far west – and face reality. No one really wants to crash the housing market (except the Greens) – too many people would go belly up.

Thing is – when was the last politician who wanted to tell you the truth, the whole truth and nothing but the truth?

source: data archive