Twyford Phil: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeTwyford Phil: Questions for Oral Answer — Questions to Ministers[Sitting date: 11 March 2014. Volume:697;Page:16467. Text is incorporated into the Bound Volume.]5.PHIL TWYFORD (Labour—Te Atatū)to the Minister of Housing: Does he believe the Government is making it easier for young people in the regions to buy their first home?Hon Dr NICK SMITH (Minister of Housing):Yes because house prices in the regions have risen more slowly under National because interest rates have been significantly lower under National and because housing affordability has improved in every region under National with National’s policies of expanding the Welcome Home Loan expanding the KiwiSaver first-home deposit subsidy and introducing the FirstHome initiative. Let me give you the specific numbers for a region like Hawke’s Bay. Between 2000 and 2008 house prices went up 116 percent and interest rates went from 7 percent to 11 percent meaning the cost of the average mortgage trebled. Under National in contrast house prices in Hawke’s Bay have gone up by 3 percent not 116 percent and interest rates have come down from 11 percent to—Grant Robertson: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! Point of order Grant Robertson.Grant Robertson: My point of order was that that answer had been going on very long but I could add to it that the Minister stayed on his feet for an extensive period after you—Mr SPEAKER: Order! The answer was very long. I was hoping it was coming to an end and kept thinking that it was.Phil Twyford: Is he making it easier for first-home buyers in Napier Hamilton and Rotorua where the proportion of first-home buyers has dropped by more than double the national average since his Government signed off on loan-to-value ratio lending restrictions and when will he concede that his housing policy has failed ambitious young New Zealanders trying to buy their first home?Hon Dr NICK SMITH: If you want to know what a failing policy is around house ownership let house prices more than double as they did during Labour’s period. The best way we can help Kiwi families be able to own their own home is to keep interest rates low and to constrain house price inflation and that is exactly what has occurred under this Government.Phil Twyford: Why did he agree to the Government signing off on loan-to-value ratio lending restrictions being applied to the entire country when 95 percent of house price inflation is taking place in Auckland and Canterbury incomes are flat-lining for most people housing costs are soaring and interest rates are heading north of 8 percent according to the banks or are they just scaremongering too?Hon Dr NICK SMITH: The first point is that interest rates today are 5.85 percent. When we came into Government they were 11 percent. So even if the Reserve Bank moves by the odd point later this week interest rates will still be significantly lower than they were after 9 years of a Labour Government—[Interruption] Nine long years as my colleagues point out. I would further make the point that the idea that the Reserve Bank can apply its monetary policy on a regional basis is the sort of loopy lunatic economics that we expect from members opposite.Tim Macindoe: In what regions has there been an improvement in housing affordability under this National-led Government?Hon Dr NICK SMITH: The data from the independent Roost Home Loan Affordability Report make for interesting reading. In Northland housing affordability under this Government has improved by 49 percent. In the Waikato where the member comes from housing affordability under this Government has improved by 39 percent. In the Hawke’s Bay housing affordability has improved by 42 percent. In the Manawatū it has improved by 49 percent. In Nelson and Marlborough my home community it has improved by 37 percent. In Otago and Southland it has improved under this Government by 37 percent. The message is very clear—Mr SPEAKER: Order!Phil Twyford: Will he admit his mistakes and change his policy to support the regions being exempt from loan-to-value ratio lending restrictions; if not how does he justify making regional New Zealand pay the price for his failure to deal with property speculators in Auckland?Hon Dr NICK SMITH: It has been a long-established consensus across this Parliament that the Reserve Bank is independent. I still would love to know—and I am sure electors would love to know as they reflect on the sort of interest rates they might pay in future—just what is the policy of members opposite. But I say again: the idea that you can have different monetary policy in different regions of New Zealand is just loopy economics.Phil Twyford: How can he continue to claim that his policies are fair and even-handed for all New Zealanders when he continues to shut first-home buyers out of the housing market in parts of New Zealand where house prices are static or even declining?Hon Dr NICK SMITH: The policies that this Government has adopted of ensuring lower interest rates for longer; of increasing housing supply; and of initiatives like the Welcome Home Loan expansion the first-home deposit scheme and the FirstHome scheme all ensure that New Zealanders get a fairer crack at home affordability than they ever got under the previous Labour administration.