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: 17 June 2014. Volume:699;Page:18532. Text is incorporated into the Bound Volume.]12.PHIL TWYFORD (Labour—Te Atatū)to the Minister of Housing: Will New Zealand return to its historic average levels of house prices to incomes and house prices to rents under his Government’s housing policies; if so how long will it take for this to occur?Hon Dr NICK SMITH (Minister of Housing):The ratio of national household income to house price deteriorated from 4.8 to 6.3 between 2000 and 2008 but has improved under this Government to 5.5—that is it got 24 percent worse under Labour and has improved by 15 percent under National. This would suggest it would take about 12 years to reverse the damage of the previous Government in respect of housing affordability and to get back to 2000 levels. The reason I have confidence that the Government’s housing policies will improve affordability is that they are based on the comprehensive report from the Productivity Commission the new house build rate has increased from 14000 houses per year to 24000 per year and new initiatives like the housing accords are freeing up land at the fastest rate in decades.Phil Twyford: Does he agree with the Reserve Bank’s view that a rise in annual net migration to 45200 by mid-2015 under current policy settings would force annual house price inflation up by 4 percentage points and force the bank to raise interest rates by as much as a further 55 basis points or 0.5 percent; if so will this make it harder or easier for Kiwi families to get into their own home?Hon Dr NICK SMITH: There is some relationship between migration and the overall demands on housing levels and that is reflected in the latest OECD housing data which shows that the most affordable houses in the world are in Greece because everybody is leaving there. That makes it very affordable housing. That is not quite the economic plan of this Government but I do understand that members opposite are quite keen on the Greek approach.Phil Twyford: Has he seen new research showing that the average New Zealand house price rose by $98 a day over the past year and by $289 a day in parts of Auckland with the average price in Auckland City now $842000 according to Quotable Value and what is he doing to ensure that Kiwi first-home buyers can save at the rate of $100 a day—or $300 a day in Auckland—with interest rates heading north of 8 percent because of his failed housing policies?Hon Dr NICK SMITH: The official data shows that house prices nationally over the last year have increased by 9 percent. I note that during the previous Government house prices increased in a single year by 28 percent and Labour members insisted that that was not a problem and did absolutely nothing. In contrast this Government has a very wide programme of freeing up land supply dealing with issues of building materials costs and bringing bills before the House to deal with those big increases in infrastructure costs that occurred with failed legislation from the previous Government. That is why I have confidence in this Government’s housing affordability agenda.Phil Twyford: Does the 39000 new affordable homes he has promised Auckland include the 700 to 800 affordable homes the Auckland Council says will actually result from his promise and how will he make up the shortfall between his promise and the actual number of affordable homes needed in Auckland for people to live in?Hon Dr NICK SMITH: I note that the increase in the issuing of building consents in Auckland in the last quarter is the fastest rate of increase in new house build for 12 years. It is the fastest rate of increase in 14 years. We now have 24000 houses a year being built with a good number of those in Auckland and that is a direct consequence of this Government’s measures through the Auckland Housing Accord and other measures to increase both supply and affordability.Phil Twyford: Rather than blaming councils for holding back affordability why does he not implement a national policy statement on affordable housing under the Resource Management Act or split out the Government’s housing affordability provisions in its Resource Management Act reforms so that they can be passed before the election or would he rather just continue to blame other people for his failed housing policy?Hon Dr NICK SMITH: I am actually encouraged by the member’s question because for 10 years Labour has denied there is any connection between the Resource Management Act and housing affordability. But the key problem is this. Labour is saying the answer is a national policy statement on housing affordability under the Resource Management Act. But the advice from officials is you cannot do a national policy statement on housing affordability unless you amend Part 2 of the Resource Management Act which is something that members on this side of the House want to get on and do and members opposite have opposed at every step of the way.