1. Question No. 1 to MinisterMETIRIA TUREI (Co-Leader—Green) to the Minister for Building and HousingTUESDAY 9 AUGUST 2016Mr Speaker took the Chair at 2 p.m.Prayers.ORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1 to MinisterMETIRIA TUREI (Co-Leader—Green): Tēnā koe Mr Speaker. Tēnā koutou e Te Whare—and happy birthday Prime Minister. [Interruption] You have got to be polite. I seek leave to have this question transferred back to the Prime Minister to whom it was originally directed.Mr SPEAKER: No. [Interruption] Order! I have ruled on this matter many times. I am not prepared to put the leave. It is the prerogative of the Government to determine who is best to answer the question. The member can proceed if she wishes; otherwise I am happy to move to question No. 2.Housing Market Auckland—Affordability1. METIRIA TUREI (Co-Leader—Green) to the Minister for Building and Housing: How many years will it take for a median-priced Auckland house to be affordable at three to four times the median Auckland household income with Auckland house prices growing almost six times faster than wages?Hon Dr NICK SMITH (Minister for Building and Housing): The ratio of incomes to house prices is too simplistic and ignores the impact of interest rates which are at 40-year lows of 4.5 percent. House prices have never been three or four times incomes with interest rates this low. There are too many unknowns like what interest rates will be in the future to state what future ratios of house price and income will be.Mr SPEAKER: Order! Can I just have a little less interjection please?Metiria Turei: Does the Minister agree that for houses to be more affordable the gap between house prices and incomes needs to reduce?Hon Dr NICK SMITH: That is just part of the equation. Of course having the lowest interest rates in more than 40 years actually makes housing much more affordable than the 10.5 percent that interest rates were when National came into Government. This Government is also committed to growing incomes and that is why for instance it has had to increase the income caps on its HomeStart scheme—because my colleagues are doing such a good job of growing the economy and growing wages.Metiria Turei: What was the Auckland median house price-to-income ratio when he became the Minister for Building and Housing 3 years ago and what is it now?Hon Dr NICK SMITH: I do not have those exact figures on me but what is interesting is that nationally the ratio of income to house price is less than what it was when National became the Government.David Seymour: Is the House to take it that the current high ratio of house prices to incomes is high purely because interest rates are low?Hon Dr NICK SMITH: No house prices are affected by a significant number of factors. One of the most important factors in Auckland is that a metropolitan urban limit and bad planning policies have made it very difficult for new houses to be built and that is why this Government is putting so much work into reforming the Resource Management Act. That is something that the Green Party has consistently opposed and it opposed the very policies that will make houses more affordable in a city like Auckland.David Seymour: What then would be housing affordability by the Minister's measure if interest rates were to return to say 8 percent as they were less than a decade ago?Hon Dr NICK SMITH: I give credibility to the independent indexes around housing affordability produced by both Massey University and interest.co.nz. They split the limit at which a portion of an average person's income is spent on a mortgage and the sort of affordable range for those is about 35 percent. That is not where it is in Auckland and that is why we have work to do.Rt Hon Winston Peters: If the Minister and his colleagues are doing such a great job to grow the economy how come senior economists now say that extracting mass immigration and consumption sees the growth rate at less than 0.5 percent and how will such a non-productive export economy failure provide the housing in the future?Hon Dr NICK SMITH: I trust those who vote with their feet. Record numbers of people are voting with their feet particularly New Zealanders returning to this country because it is doing well. And I challenge that member to state a Western economy that is doing better than the New Zealand economy.David Seymour: Can the Minister confirm that mortgage interest rates hit 11 percent in each of the periods 1996 to 1999 and 2005 to 2008 and can he identify any common factor in those two periods?Hon Dr NICK SMITH: It is correct that interest rates were very high particularly during the term of the last Government and that drove housing affordability in the years 2006 2007 and 2008 to the worst levels ever under those independent measures and despite the high house prices that we have now in all regions of New Zealand by those independent indexes that measure and include interest rates housing is surprisingly more affordable than when we became the Government.Andrew Bayly: What was the core reason identified by the Productivity Commission for the sustained rise in house prices in Auckland since 2000 and what is the Government doing to address this problem?Hon Dr NICK SMITH: The Productivity Commission identified that the core problem was restrictive planning policies from fragmented councils that consistently blocked new housing developments. That is one of the reasons why the Government merged the Auckland councils and provided a streamlined process for a new Auckland plan that is close to completion. I do note that both the Green and Labour parties opposed that streamlined process for a new unitary plan. That core work has been complemented in the short term by special housing areas and in the long term by the National Policy Statement on Urban Development and the Government's Resource Management Act reforms.Rt Hon Winston Peters: Why is the Minister blaming everybody but the Government and himself for a result that sees us building less houses now than we built 42—Hon Member: It's fewer.Rt Hon Winston Peters: —or fewer; many less. Call it what you like: it is a crisis sunshine.Mr SPEAKER: Order! I think—Rt Hon Winston Peters: Forty-two years ago—we are building fewer houses now than we built 42 years ago—[Interruption]Mr SPEAKER: Order! The question has been asked. The question can be answered.Rt Hon Winston Peters: No no. Point of order Mr Speaker.Mr SPEAKER: Order! Rt Hon Winston Peters: I have not got to the punchline yet.Mr SPEAKER: Well the member will have to wait and use another supplementary question and be far more concise.Hon Dr NICK SMITH: When I became the Minister for Building and Housing New Zealand was building 14000 houses per year. The latest figure is that we are building more than double that—29000 houses per year. The main crisis that I hear in the building industry is a shortage of skills and that is why the Government is investing in a record number of apprentices. Only a blind man would not recognise the building boom under way in New Zealand right now.Andrew Bayly: What impact would a policy of halving house prices in Auckland have on ordinary New Zealanders?Hon Dr NICK SMITH: A policy of the Government directly halving house prices in Auckland would have a devastating impact on hundreds of thousands of Auckland families who would be left in negative equity. This policy from the Greens was rejected by Labour and shows their memorandum of understanding is already in tatters. [Interruption] Mr SPEAKER: Order! [Interruption] Order!