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: Does he stand by his statement that we cannot afford to put the current economic recovery at risk by allowing house prices to spiral out of control"; if so what impact if any will the Government's housing package announced this morning have on the ratio of house prices to household income in the short term?Hon GRANT ROBERTSON (Minister of Finance): I do stand by my statement from earlier today. New Zealand's economic recovery from the effects of COVID-19 is among the best in the world and we do see a risk to the recovery based on what we have seen in the recent increases in house prices. What we want to see in the short term is more sustainable house prices and that is why we have chosen to use a range of levers that the Government has available to it to reduce upward pressure on prices. It is however too early to be specific about the effect of these measures on the ratio of house prices to household incomes.Hon Julie Anne Genter: Does the Government have a target for dropping the median house price relative to median household income given that it is more than double where it was in the 1990s?Hon GRANT ROBERTSON: There are a lot of variables and factors that go into where house prices sit particularly with regard to a ratio to incomes. We obviously want to see incomes lift. We are also very very clear that the level of house price rises we have seen in recent months in New Zealand is completely unsustainable and that's why we've acted today.Hon Julie Anne Genter: How can the Government make a substantial difference to house price affordability when they are aiming for continued growth in house prices?Hon GRANT ROBERTSON: Well I don't want the member to read into my answers anything other than the fact that we believe that the level of house price rises that we've seen is unsustainable. We also want to see incomes lift but being able to give specific numbers around where we think things will land relies on behavioural economics other aspects of the housing market and other players. What we are committed to is making sure that houses are more affordable and more first-home buyers get into houses.Hon Julie Anne Genter: Has he seen Bernard Hickey's analysis that if house price growth moderates to 4 percent a year and household incomes rise 5 percent a year then it would take 50 years—that's half a century—to get house prices to income ratio back down to the 2001 level?Hon GRANT ROBERTSON: I've seen a variety of analysis including from Mr Hickey around these matters. I can only repeat for the member: on this side of the House we are absolutely determined that we will not see the unsustainable house price rises that we have seen that we will see more first-home buyers get into their homes and we will continue to protect renters along the way.Hon Julie Anne Genter: Why didn't he increase the brightline test to 15 or 20 years as recommended by Treasury and does he think that increasing it to 10 years will cause people to hold on to investment properties for longer to avoid paying tax?Hon GRANT ROBERTSON: There was obviously a variety of advice that we got from officials on this matter. We think we've struck the right balance with the 10-year period. I do think for a lot of renters they want to know that their landlords will be in the market for a decent length of time. Stable renting arrangements are good for landlords and renters.Hon Julie Anne Genter: Has he received any advice on what impact increasing first-home buyer grants will have on house prices in the short term?Hon GRANT ROBERTSON: Again there's a wide variety of advice on that issue as well. What we want to be absolutely clear about here is that we are making this available to more New Zealanders to be able to access the kinds of things that help leverage them into a home. It is true that I think in 2019 we made the change that you needed a 5 percent deposit. That will mean that from 1 May an investor would require eight times that level of deposit in terms of the loan-to-value ratios. So I do think those home grants and home loans have a role to play in the system."