Twyford Phil: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeTwyford Phil: Oral Questions — Questions to Ministers[Sitting date: 29 March 2016. Volume:712;Page:9929. Text is incorporated into the Bound Volume.]11.PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he think home ownership in Auckland is affordable given it now reportedly takes nearly half the income of a typical first home buyer to buy a lower-end home?Hon Dr NICK SMITH (Minister for Building and Housing): I think the member has made a mistake with the question because the median household income in Auckland is currently $82000 and I do not think anybody expects to be able to buy a house for $41000. House prices have never been half of people’s incomes—at no time in New Zealand history—and are never likely to be. Perhaps it is just one of those others like a universal guaranteed income on “Planet Labour”.Phil Twyford: Is rapidly declining home affordability the reason that Barfoot and Thompson recently reported that more than one-third of young Aucklanders think that they have no chance of owning their own home; if not why does he think they are losing hope after 8 years of his Government?Hon Dr NICK SMITH: There are two independent measures of housing affordability. The first of those is the AMP360 Home Loan Affordability Report index and the other is produced by Massey University. Both of those indexes actually show that housing affordability not just in Auckland but in New Zealand is more affordable now than it was in 2008—[Interruption] Absolutely true. Let me give the numbers. In 2008 it took 101 percent of a person’s average income in Auckland to service a mortgage. Today that figure is 87 percent. I would also point out that in respect of Auckland the increase in housing supply and the reduction in interest rates have actually been improving the issue over the last 6 months.Phil Twyford: How can he claim that Auckland housing is more affordable now when it takes 47.9 percent of the average first-home buyers income to service a mortgage—Dr Smith—up nearly 10 percent of their income on the 38.9 percent that it took when his Government took office?Hon Dr NICK SMITH: I have the exact figures from the index and they show that in 2008—when remember interest rates were 101 percent and let us remember we had house price increases—Iain Lees-Galloway: 101 percent!Hon Dr NICK SMITH: —when the index was 101 percent and interest rates were double what they are now and remember when Labour was in office we had Auckland house prices increase by 27 percent in 1 year such that both the Massey University index and the AMP360 index show that housing affordability in Auckland is actually more affordable now than what it was in 2008.David Seymour: What would the Massey index show if interest rates returned to 2008 levels?Hon Dr NICK SMITH: Interest rates were an average of 10.6 percent in 2008. They are currently at the lowest levels in 50 years and as a consequence the cost for the average Auckland household of interest rates returning to the level they were under the Labour administration would be a doubling of the housing costs for every one of those households. That is why interest rates and keeping them low for longer are pivotal to improving New Zealanders’ chances of being able to own and buy their own home.Phil Twyford: What will he do to address the housing crisis given that his Crown land policy has come up with less than 100 hectares of land and still has not built any homes; the Auckland Unitary Plan is in strife; his housing accord targets are failing to meet their targets and are about to expire; and Auckland house prices are already rebounding only a few months after the Reserve Bank loan-to-value ratio changes and the brightline test?Hon Dr NICK SMITH: I remember this member in this House saying a year ago that house prices by March 2016 would be over a million dollars. Well he is out by a quarter of a million—[Interruption] He is out by a quarter of a million. The member says that there have been no houses that have been built though the Crown land programme. I would love to take him to some of those gorgeous homes that I opened last week on that programme which have been successful. I could take the member to Weymouth I could take the member to Hobsonville because the truth is that more new houses are being built in Auckland for 10 years and more of them are in an affordable price range because of the initiatives of this Government.Phil Twyford: Does he agree with the Prime Minister who according to the New Zealand Heraldis “frankly unapologetic about the massive increase in Auckland residential property values which has resulted in many established Aucklanders becoming relatively rich but younger people being locked out of the market.”?Hon Dr NICK SMITH: I do agree with the Prime Minister that we do not want to be at the top of the table that Phil Twyford buys up to because the table that he refers to comparing international housing affordability has Greece house prices being the most affordable—and house prices in Spain have actually come down quite a lot. I accept that if we had some of the loopy policies that members opposite suggest our economy would be like Greece’s and our house prices would be like Greece’s. This Government is about actually having a successful economy having a growing number of houses—Mr SPEAKER: Order! I have heard plenty.