6. Housing Affordability—Homeownership and First-home BuyersMETIRIA TUREI (Co-Leader—Green) to the Minister for Building and HousingHousing Affordability—Homeownership and First-home Buyers6. METIRIA TUREI (Co-Leader—Green) to the Minister for Building and Housing: Ka tū a ia i runga i te mana o tana kōrero The proportion of New Zealanders living in rental homes is not changing dramatically and owner-occupiers will remain the dominant living arrangement for most Kiwi families into the future" i te mea ā e ai ki ngā tatauranga hou nō mai anō i te tau Kotahi mano iwa rau rima tekau mā tahi i taka ai te hunga whiwhi i tōna ake whare ki raro rā nō?[Does he stand by his statement that "The proportion of New Zealanders living in rental homes is not changing dramatically and owner-occupiers will remain the dominant living arrangement for most Kiwi families into the future" given that home ownership is at its lowest level since 1951 according to the latest census?]Hon Dr NICK SMITH (Minister for Building and Housing): Yes. The latest census data has homeownership at 65 percent which is more than double the 31 percent who are renting. The 65 percent compares with 68 percent in 2001. A decline of 3 percent since 2001 is not dramatic and I am confident it will be reversed by the wide-ranging housing programme the Government has under way of which the most important part is freeing up land supply and reform of the Resource Management Act—which the Greens have consistently opposed. Metiria Turei: Is the Minister aware that more than half of all Aucklanders live in rental homes according to Statistics New Zealand?Hon Dr NICK SMITH: There is no question that the issues in Auckland are connected to the flawed policies of a metropolitan urban limit that has seen house prices more than treble. It is ironic that the Green members who have actually championed those tight urban constraints now complain about its consequences. The important thing is that the Government has broken through that through the use of both the special housing areas and now Auckland's new unitary plan. Metiria Turei: Why is the Minister trying to deflect blame when under this Government's watch Auckland is now the most expensive city in the world to buy a home in relative to income?Hon Dr NICK SMITH: No I dispute that. I was in Sydney last week meeting with the housing Minister of New South Wales and actually house prices in Sydney have been similar to those in Auckland. Interestingly last Friday they embarked on a reform programme very similar to the new unitary plan and the new policy statements around urban development that will free up land supply and make homes more affordable for people like those in the city of Auckland. Simon O'Connor: How has the affordability of homes changed since 2000 and what measures does the Government have in place to improve affordability? Hon Dr NICK SMITH: Home affordability was hammered during the period 2000-08 when average national house prices doubled and interest rates went from 6 percent to 11 percent. Since 2008 interest rates have more than halved to the lowest level in 60 years. Owning a home is actually now 30 percent more affordable on average across New Zealand than when we became the Government. The exception is Auckland where poor planning policies have artificially driven up land prices but the combination of new supply and the unitary plan is now seeing the house prices there cool.Metiria Turei: In response to the Minister's admission that Auckland housing is in a crisis will he consider implementing the Green Party's progressive ownership rent-to-buy programme which would help Kiwi families especially those in Auckland into their first home and save them more than $100 a week compared with a commercial mortgage?Hon Dr NICK SMITH: I have seen the Green Party's housing policies and they rely on voodoo economics. That is that somehow the Government—Hon Bill English: Just like Labour.Hon Dr NICK SMITH: Just like Labour; the Minister of Finance does make the correct analogy—that Labour and the Greens' promise to build 100000 homes with less than 1 percent of the money that is required is nothing more than a joke.Metiria Turei: Does the Minister expect that homeownership rates will continue to fall given that people who are earning decent incomes who would traditionally have been able to buy their homes are now shackled with student debt and for many years after they graduate?Hon Dr NICK SMITH: I am confident that Kiwi families will improve their homeownership with the Government's policies. For instance through the new unitary plan there has been a trebling in the amount of Government support through HomeStart for first-home buyers. There has also been an increase to half a billion dollars a year of support through the KiwiSaver schemes and it is the maturing of those initiatives that will reverse a trend that has been 25 years long.Metiria Turei: Is the Minister denying the evidence that came out today that first-home buyers are now having to borrow something like $400000 in order to afford their own home; and what does it say about the Government's economic mismanagement that university graduates who used to be able to afford to buy their own home now cannot do so because the prices are too high?Hon Dr NICK SMITH: I note that if those figures are translated—and it is actually not $400000—$340000 is the average first home mortgage and with interest rates at the lowest level that they have been in 60 years a person would be paying less on average than they would by renting. But the greatest irony I find in the Green Party's policy which it announced just this week is that it is going to provide the maximum support for university graduates who actually have the highest rates of homeownership. That is where the Government's HomeStart scheme is far more equitable.Metiria Turei: Why does the Minister not just admit that his Government's housing and economic policies have failed when even highly educated well-paid university graduates cannot afford to buy their own home in this country?Hon Dr NICK SMITH: Quite the contrary; I would draw the member's attention to the latest OECD report which shows that the New Zealand economy is performing better than pretty much any other economy in the OECD. Secondly in respect of housing the boom in the level of housing that is being built across New Zealand now up to nearly 30000 homes per year shows that the Government's measures to increase supply are working."