7. Housing—Affordability for Young PeopleMETIRIA TUREI (Co-Leader—Green) to the Prime MinisterHousing—Affordability for Young People7. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Tū ai a ia i runga i te mana o tana tauākī e pā ana ki te mākete whiwhinga whare My advice is to believe in the system because it will work for young people"?[Does he stand by his statement about the housing market "My advice is to believe in the system because it will work for young people"?]Rt Hon JOHN KEY (Prime Minister): Yes. However the system would definitely not work for young homeowners if house prices crashed by half as advocated by that member. That Green-Labour policy would be a war on the poor.Metiria Turei: How exactly is the system working for the young Aucklanders trying to save a deposit while the average house price rises $570 a day and their rent rises twice as fast as their wages?Rt Hon JOHN KEY: I think there are a number of factors when you are a young person. One certainly is access to quality education which is improving under this Government. I think the second thing is ensuring that there are job opportunities for New Zealanders who ultimately do invest in their education. We know that unemployment rates are falling and opportunities are rising in a place like Auckland—indeed all around the country. Secondly if we look at a young couple who wants to buy a house or a young individual who wants to buy a house whether it is in Auckland or anywhere around New Zealand the Government has KiwiSaver HomeStart which has recently just had both the income thresholds and the asset price thresholds increased. That does allow New Zealanders to access those. If you look at somewhere like Hamilton for instance I think that just under 79 percent of the sales that took place were in the $550000 category where KiwiSaver HomeStart would work for those youngsters. So I think overall you would say it is working for people.Metiria Turei: How can he argue that his policy is working HomeStart included when in 2001 46 percent of people aged between 20 and 40 owned their own home and in 2013 after his policies were in place that dropped to only 35 percent of people aged between 20 and 40 years old?Rt Hon JOHN KEY: I am always suspect about Green Party numbers but as I say and I am pleased that the member did raise the issue of 2001 as I pointed out today to my good and close friends in the Labour Party in that period between 2000 and 2008—so the 2001 period the member is talking about—there was a staggering national increase of 102 percent in house prices and in Auckland an 87 percent increase in house prices. That probably was a crisis compared with the 43 percent and 82 percent increase respectively under a National-led Government.Denis O'Rourke: What advice would the Prime Minister give to the many grandparents and parents who own their own homes when asked by their grandchildren or children why it is that they cannot realistically expect to become homeowners themselves especially if they live in Auckland?Rt Hon JOHN KEY: The first thing I would say to those grandparents is: is it not lovely that under a National-led Government they can give their grandkids a hug in New Zealand where they are now living as opposed to overseas when New Zealand First was last in Government?Metiria Turei: Is the Prime Minister genuinely—[Interruption] Is the Prime Minister seriously telling New Zealand families that it is perfectly fine to give their grandchildren a hug and then send them back out to their cars to sleep because homelessness has become such a serious issue in this country? Is that what he is saying to New Zealanders now?Rt Hon JOHN KEY: No. But what I am saying is that what you have seen in the last period of time in New Zealand is a significant number of New Zealanders returning and a significant number of New Zealanders choosing not to go. Personally I think that is a vote of confidence by those New Zealanders in our country and in our future. What the Labour Green and New Zealand First parties seem to be saying is that New Zealand was so much better when people were deserting the country and I just do not agree with that proposition.Metiria Turei: Does the Prime Minister agree with the World Bank the United Nations and Demographia that the price to income ratio of three times the median household income is the standard measure for an affordable home?Rt Hon JOHN KEY: I do not think that in international cities there would be the case anywhere that I think the member could quote. So I think what is realistic though when looking at affordability for homes is: do people have a job to support the mortgage; are interest rates at an affordable rate for them; is the prospect if they lose their job or want further overtime likely to be there; is there in some cases assistance from the Government as there is under the National-led Government through KiwiSaver HomeStart; and most importantly what is the pipeline of development of housing in the case of New Zealand? Under this Government it is extremely significant. That is why we are seeing a record number of houses being built.Metiria Turei: Is that the excuse for unaffordable housing that he would give to the principal of an average-size primary school who would have to spend about eight times their income to buy a median-priced house in Auckland; I mean is the housing market working for that family?Rt Hon JOHN KEY: Well the member talks about an average principal of a New Zealand primary school I think she quoted. If they live in Hamilton 71 percent of all sales that took place were under $500000. But if they lived in Auckland 30 percent of sales that took place were under $600000 and 37 percent under $650000. My colleague before was just looking on TradeMe and the number of properties in Auckland that are under $500000. There are many properties listed there. Not every property that is bought and sold is done so at the median rate. That is the reality of the property market. [Interruption]Mr SPEAKER: Order! [Interruption] Order! If Mrs King and the Prime Minister wish to have a discussion I would suggest they do it in the lobbies after question time.Metiria Turei: So is it his advice—[Interruption]Mr SPEAKER: Order! Prime Minister there is a question to you.Metiria Turei: Is it the Prime Minister's advice then to a senior station officer in the Fire Service in Auckland who earns a maximum of $77000 a year that they should just abandon the city they work in and go and live somewhere else—is that his advice now?Rt Hon JOHN KEY: No but in many cases and the member has quoted one—$77000—in all probability these are relationships where there are two members of the household working. So again let us just argue that the other partner is earning $50000 or $60000 a year—they have got an income of about $140000 a year. I accept that there are people who earn more than that and I accept that there are people who earn less. With $140000 a year on very low interest rates they will be able to afford a property in Auckland. It may not be the property that the member is talking about but there will be properties they can afford at those levels."