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: 13 March 2014. Volume:697;Page:16683. Text is incorporated into the Bound Volume.]12.PHIL TWYFORD (Labour—Te Atatū)to the Minister of Housing: Does he expect housing affordability to improve in the coming year?Hon Dr NICK SMITH (Minister of Housing):I expect interest rates to rise above their 40-year lows as the economy improves but I do not expect them to rise to the unaffordable level of 11 percent which is what they were when we first came into office. I also expect as do the Reserve Bank and most commentators house price inflation to slow. This cooling of the housing market will help affordability. I am also confident that this Government’s housing supply initiatives like the Housing Accords and Special Housing Areas Act will improve the supply and affordability of housing. I also expect average wages to continue to rise faster than inflation which also helps housing affordability.Phil Twyford: Does he expect housing affordability to improve with interest rates heading north of 8 percent coupled with massive mortgages that are the new normal since average house prices in Auckland have been nudging $700000 under his watch?Hon Dr NICK SMITH: I would note that interest rates are over 5 percent and went up by 0.25 percent today. That is a long way from the 11 percent that they were under the previous Labour Government. In respect of house prices—and I note the member mentions Auckland—over the last 5 years under this Government house prices in Auckland have gone up by 26 percent. Under the previous Government they went up by 82 percent. That is why I am sure those concerned about housing affordability will stick with this Government’s policies.Jami-Lee Ross: What success is the Government’s housing initiatives like the Housing Accords and Special Housing Areas Act having for housing supply?Hon Dr NICK SMITH: The rate of house building is soaring particularly in Christchurch and Auckland. The latest building consent figures in Christchurch show the fastest rate of house builds ever in that city’s history. The growth in Auckland house builds is the strongest in more than a decade. Nationally we have gone from 13000 houses per year being built in 2012 to the current rate of 23000 homes per year. In other words National’s policies are delivering another 10000 homes per annum in New Zealand which leaves the question of why the Opposition would want taxpayers to subsidise building houses.Phil Twyford: Was it his intention to make the housing market easier for property speculators to have a field day at the expense of first-home buyers and hard-working families and to encourage the sale of houses worth up to $1 million to soar while sales of affordable homes are plummeting?Hon Dr NICK SMITH: If the member is concerned about soaring house prices he should look across the country at the record of the previous Government last decade when prices truly went out of control. This Government’s policies which are increasing housing supply and keeping interest rates low for longer and this Government’s initiatives of expanding the KiwiSaver first-home deposit scheme and expanding the Welcome Home Loan scheme are the smart way in which we help New Zealanders get to own their own homes.Phil Twyford: Does he think that whining about historical data on interest rates is relevant to first-home buyers who today are locked out of the housing market or to struggling families facing big increases in their mortgage payments because of rising interest rates on his watch under this Government?Hon Dr NICK SMITH: As a parliamentarian who has been here for some years I very proudly stand as a National member who has consistently during my entire political career been more focused on and more successful at having lower interest rates for home owners than members opposite have. In fact the record is very clear that under Labour Governments in the 1980s and under Labour Governments in the 2000s we had the highest interest rates and that consistently under National Governments interest rates have been lower.Phil Twyford: What photo opportunities does the Minister have planned in his increasingly desperate attempt to divert attention from a policy that is a shambles and a fiasco and is resulting in first-home buyers being shut out of the market rapidly rising interest rates and power prices and incomes flat-lining for most people; or does he still think that housing is becoming more affordable under his watch?Hon Dr NICK SMITH: When we have got the highest number ever of homes being built in Christchurch when we have got the biggest increase in new house builds in Auckland in more than a decade when we have got a record number of community houses being built and when we have got housing affordability at an average level of 35 percent better under this Government than what it was when we came into office yes I am proud of our record on housing affordability.