2. Question No. 2—FinanceHon JULIE ANNE GENTER (Green) to the Minister of FinanceQuestion No. 2—Finance2. Hon JULIE ANNE GENTER (Green) to the Minister of Finance: What steps if any will he take to ensure the Government's economic response to the current COVID-19 outbreak does not increase house prices? Hon GRANT ROBERTSON (Minister of Finance): Mālō 'aupito. The Government has already undertaken a number of measures that will lead to more sustainable house prices. The comprehensive package that we announced in March addressed both the supply- and demand-side drivers including changes to discourage speculators as well as making sure that we tackle the various barriers on the supply side that have hindered the building of new homes. In addition the Reserve Bank is proposing to tighten lending restrictions further including to highly leveraged investors. We have also directed the Reserve Bank to take account of Government policy to support more sustainable house prices. We are seeing promising signs that these policies are having an effect with record levels of building consents being issued and house price growth starting to slow. The housing crisis however has been decades in the making and I acknowledge it will take time to turn but we are starting to make a difference. We will continue to monitor and assess the impact of the outbreak including on housing.Hon Julie Anne Genter: Does he consider the Government's current actions and plans sufficient when house prices increased 25 percent in the last year alone and CoreLogic have just released a report saying affordability is the worst it has ever recorded?Hon GRANT ROBERTSON: As I said in my primary answer this housing crisis has been decades in the making and annual price increases obviously still continue to have a fair chunk of the period of time before we made our announcement in March. What I would note is that on the rolling averages of the last three months we are seeing that house price growth slow down.Hon Julie Anne Genter: What weight is the Government putting on Treasury and Reserve Bank forecasts that house price growth will slow and has that weight changed over the last few months given house prices continue to rise well above those forecasts?Hon GRANT ROBERTSON: As has been traversed a number of times including with the member's colleagues around this matter house price forecasting is a challenging area. What I would say is along with Treasury and the Reserve Bank most of New Zealand's major banks are expecting a significant slowing in house price growth.Hon Julie Anne Genter: Does he have a goal to make house prices affordable or is his focus on sustainability a technical Reserve Bank definition that could mean sustainable and incredibly high house prices?Hon GRANT ROBERTSON: There is a lot of debate about the definition of the word sustainable but I can certainly say that my commitment and the Government's commitment is to make house prices both sustainable and more affordable.Hon Julie Anne Genter: Does he think that house prices would have to fall from the stratospheric levels they've reached in the past year in order to return to affordable levels relative to incomes in the short term?Hon GRANT ROBERTSON: The most important part of that question was the very last words of it from the member. This is an issue that will take time to resolve but we have put in place the policies that I believe will make a significant contribution to slowing down that price growth. Obviously we also seek to see people's incomes increase as well.Hon Julie Anne Genter: Is he concerned that giving an implicit guarantee to homeowners that his Government won't let house prices fall may be contributing to higher house prices and reducing the chance of a soft landing?Hon GRANT ROBERTSON: No. I don't accept that that's what the Government is doing. There are many factors that influence house price growth. The Government's role is only part of that. Other conditions including monetary policy conditions but also including the wider economic environment contribute to it. The Government is putting its best foot forward to ensure that house prices are more sustainable and more affordable.