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: 20 May 2014. Volume:699;Page:18084. Text is incorporated into the Bound Volume.]9.PHIL TWYFORD (Labour—TeAtatū) to theMinister of Housing: Is he concerned that New Zealand has gone from the 10th highest rate of house price growth in the OECD from 2004-2011 to the highest in 2013?Hon Dr NICK SMITH (Minister of Housing): I am concerned that house prices rose by 9 percent in 2013. That is why the Government initiated a whole batch of reforms on land supply development costs and materials and expanded support for first-home buyers. The member is being very selective though in his choice of years in the study because in the preceding 5 years house prices rose by only 1.8 percent—i.e. 11 percent over the last 6 years. In the preceding 6 years house prices rose by over 10 percent every year for 6 years—i.e. 83 percent. The difference in what the previous Government did was that for 6 consecutive years with house prices over 10 percent a year it did nothing; we have 1 year at 9 percent and we have got a big package of reform.Phil Twyford: Does he agree that there is market failure when house prices increase so much faster than rents and wages; and when will he stop whining about historical data and get on with helping young Kiwi first-home buyers into their own homes?Hon Dr NICK SMITH: Yes there was serious market failure in Auckland with a metropolitan urban limit that drove land prices through the roof. The interesting part is that Mr Twyford was one of the architects of the metropolitan urban limit. We have broken it and we have got 33500 new sections coming on stream.Jami-Lee Ross: Which countries in the OECD study showed the most favourable house price data and what elements of those countries’ economic policies is the Government considering adopting?Hon Dr NICK SMITH: In respect of the table quoted in the original question the countries that had the lowest house price rises were Greece and Spain. These countries have unemployment rates of over 25 percent. They have massive debt problems and huge deficits. People are leaving those countries in droves. It might be the economic prescription that members opposite have for New Zealand; we have a very different vision.Phil Twyford: Does he agree with the Prime Minister that falling rates of homeownership Kiwi first-home buyers being locked out of the market by loan-to-value ratios and Government agencies referring people to live in campgrounds are all symptoms of an economy that is successful?Hon Dr NICK SMITH: The long track record of homeownership post - World War II is very clear. That is homeownership rates declined in periods when interest rates were high and improved in years when interest rates were low. It is also interesting in looking at that long-term study that interest rates were always higher under Labour Governments and lower under National Governments. That is why people who want to enhance homeownership will vote for a John Key - led Government.Jami-Lee Ross: Has he received any reports of proposals for managing migration pressure on housing; if so what feedback has he seen on those proposals?Hon Dr NICK SMITH: New Zealand’s migration issue is that Kiwis are voting with their feet and not leaving. That should be celebrated. But I have heard a proposal onMorning Report yesterday that we should cut immigration numbers by between 20000 and 30000. But when I listened toMorning Report this morning I heard a person from the same organisation saying that that was not true. The first report was from Mr Twyford; the second from Mr Cunliffe. I do not think they have got any idea what they stand for.Phil Twyford: How many of the 22000 offshore landlords he cited in the House last week own more than one house and how many of the 185000 empty houses are owned by offshore owners or syndicates?Hon Dr NICK SMITH: What we know from the Inland Revenue Department data is that there are 22000 taxpayers who live offshore and own a home in New Zealand and are receiving rent. We further know that that number has been constant over the last 5 years. There was some increase in that number under the previous Government which like most things on housing did absolutely nothing about it. That number is 1.2 percent of our housing stock. We want to focus on the main game in housing. The Productivity Commission said that it was a non-issue and that is why we are focusing on things like land supply infrastructure costs materials—those things that will make a difference.Rt Hon Winston Peters: Why is the Government so against keeping records of sales to offshore buyers and how can the Government possibly explain its policy on the housing crisis when it has no idea how much housing stock is in foreign hands?Hon Dr NICK SMITH: The advice the Government has received from Treasury from the Productivity Commission and from my own ministry is that foreign buyers are having no substantive effect on the New Zealand housing market. If we had some registry where every time you wanted to buy a house you had to show your passport or evidence of your residency that would not answer the question either because the advice is that the bulk of people who are buying houses from overseas are actually then coming to New Zealand to live and gaining residency and citizenship. So if you really wanted to get accurate data you would have to fill out a whole lot more forms to then trace that further. Having an argument as to whether the number is 1.3 percent or 1.4 percent takes our housing debate nowhere.Rt Hon Winston Peters: Why on earth is he trying to maintain that argument for—Hon Steven Joyce: Winston’s arguing for more pen-pushers.Rt Hon Winston Peters: —New Zealand offshore housing in the country and especially in Auckland when the OECD the Reserve Bank—and “Big Ears” when he is awake—and Treasury are claiming that it is adversely affecting both inflation and high interest rates?Hon Dr NICK SMITH: The member is wrong. The reality is that the advice from Treasury the advice from the Productivity Commission and the advice from my own ministry is that foreign buyers are having no substantive effect. It is the oldest trick inthe book whether it is crime whether it is unemployment or whether it is a challenge like housing for Mr Peters to jump on the bandwagon and say that it is all the foreigners’ fault. That will get us nowhere. We should address the real issues.Hon Tau Henare: Where’s the smoking gun?Rt Hon Winston Peters: It is coming son. Why is the Government trying to defend the recent record of thousands of houses bought by offshore buyers ahead of the right of New Zealanders to be able to afford a house in their own country?Hon Dr NICK SMITH: The data from the Inland Revenue Department is that 22000 overseas persons own property in New Zealand and rent it. The bulk of those are actually expat New Zealanders who are living overseas doing their OE and who own a house whom members opposite now want to ban from being able to own a home in this country. We say that that is a nonsense.Phil Twyford: Does he agree with theNew Zealand Herald which said yesterday in an editorial that his refusal to seek comprehensive data “raises the implication that the Government does not want accurate data for fear of what may be revealed.”?Hon Dr NICK SMITH: My correct comment was that I rejected a register and I maintain the position that it would be a waste of money. I am happy to receive further information but I have to say that an argument over whether it is 1.3 percent or 1.4 percent does not make a dime of difference to the major arguments that we need to address if Kiwis are going to be able to afford their own homes.