Brown Peter: Questions for Oral Answer — Questions to Ministers 
Brown Peter: Questions for Oral Answer — Questions to Ministers 
[Volume:638;Page:8483] 
5.  
PETER BROWN (Deputy Leader—NZ First) 
 to the  
Minister of Finance 
: Does he agree that having minimal restrictions on non-resident foreign ownership of residential property is increasing the demand for housing in New Zealand and contributing towards the crisis in housing affordability; if not why not? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 No. As I said last week it seems that an increase in house prices has occurred across almost the entire country and often in areas of previously quite low housing value and still relatively poor housing areas. There is little evidence that foreign owners are moving to these areas or indeed to many middle-class areas and placing pressure on housing prices. 
Peter Brown 
: Is the Minister aware that the average wage in the UK Germany and Japan is about twice our average wage when converted into New Zealand dollars; and does he think it is fair that foreigners from those countries who have twice the purchasing power of Kiwis are gifted an unrestricted and irrefutable advantage in our housing market? 
Hon Dr MICHAEL CULLEN 
: As I said before there is no evidence that foreigners are actually entering the residential housing market in large numbers. Of course some say that 7 years ago when the New Zealand dollar was under US40c those differentials in market value terms were very much higher than they are today. There is not a great deal of data on this issue. The only available data from Quotable Value shows that property purchased by those with overseas addresses is approximately 0.1 percent of residential dwelling purchases since 1990 and 0.3 percent of what are called residential vacant purchases—which everyone understands as sections. Some of those of course are sold back to New Zealanders for redevelopment purposes. 
Peter Brown 
: Is the Minister aware of the survey by Britain’s National Savings and Investments which found that a quarter of Britons are looking overseas particularly to New Zealand to buy their first house as a stepping stone to buying property in the UK; and does he believe that practice will provide positive outcomes for young Kiwis trying to buy their first home? 
Hon Dr MICHAEL CULLEN 
: I am not aware of that survey. I assume that Britons are starting to run out of Spanish houses to buy—there has been a strong trend to do that over recent years. We have not seen any evidence of that actually occurring in large amounts in New Zealand. The primary drivers of house price increases in New Zealand have been areas such as the growth in employment the growth in real incomes and the growth in population combined. Of course in terms of affordability interest rates come into play as well. 
Te Ururoa Flavell 
: Kia ora Madam Speaker. Kia ora tatou. What response does the Minister make to the statement from the Campaign Against Foreign Control of Aotearoa that foreign investment will boost house prices even more making it far too expensive for the average New Zealander to buy a house; a situation fast reaching crisis point given a study by Professor Bob Hargreaves the director of Massey University’s property foundation which shows that home affordability is at its lowest level since 1989? 
Hon Dr MICHAEL CULLEN 
: As I said before I do not believe that the response of the Campaign Against Foreign Control of Aotearoa actually rests upon any solid evidence at all. These are not the factors driving house prices or the related—though other factors are also involved—housing affordability index. The Government is moving in terms of a shared equity scheme and the KiwiSaver scheme which starts on 1 July provides very significant support for the accumulation of a deposit for a first home. These are potential answers. One answer I saw in that newspaper story was that we should engage in a massive house-building programme. That of course would be hugely inflationary given our very tight labour market and very strong construction sector which the Governor of the Reserve Bank Alan Bollard is actually trying to weaken at the present time. 
Peter Brown 
: Is the Minister aware of any public comment on this issue such as one on the  
Stuff 
 website which states: “I have been living in Invercargill since 2002 and I know 5 Australians who have bought a combined total of 46 houses here since 2003.”; if not does he not think his Government’s policy on this issue is out of step with public reality? 
Hon Dr MICHAEL CULLEN 
: No I do not think it is out of step with public reality. What is more out of step is the policy of some countries such as Australia to try to place very strong limits on people who are not Australian citizens owning property to the point where for example the chief executive of one of their major banks was not allowed to buy a house in Sydney for a number of years. I think that is a rather daft kind of politics and policies. 
Heather Roy 
: Is not the real crisis the fact that red tape is constraining housing supply and driving up prices as was highlighted in yesterday’s www.interest.co.nz housing affordability study; and when will the Minister’s Government fix the Resource Management Act so that our kids can afford homes of their own? 
Hon Dr MICHAEL CULLEN 
: I think the problem with what the member is proposing in terms of open slather on the Resource Management Act is that it would lead to uncontrolled urban growth and no doubt further demand for construction of motorways further demand for construction of public transport and therefore—contrary to what the member would like—further demand for tax increases to pay for all of that. 
Peter Brown 
: A point of order Madam Speaker. 
Madam SPEAKER 
: Point of order Peter Brown. 
Peter Brown 
: I was quicker this time than my colleague across the House! 
Madam SPEAKER 
: Yes you are doing well. 
Peter Brown 
: I seek leave to table information showing that our average wage is half that of Germany the UK or Japan. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. 
Peter Brown 
: I seek leave to table public feedback from the  
Stuff 
 website to enable the Minister to come up to speed with public opinion and my assertions. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes. 
Peter Brown 
: I seek leave to table a press release from Britain’s National Savings and Investments company which states that a quarter of Britons are looking overseas particularly to New Zealand to buy their first home. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes. 
Heather Roy 
: I seek leave to table David Chaston’s www.interest.co.nz housing affordability study which shows that housing supply is the real solution to the crisis in housing affordability. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection.