Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 05 April 2016. Volume:712;Page:10145. Text is incorporated into the Bound Volume.]4.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement from 2013 that if Auckland prices continue at the same rate the bubble would burst and “you would leave a lot of potentially first home buyers with very large loans and an over-valued property and effectively negative equity where they owe more than the property’s actually worth”?Rt Hon JOHN KEY (Prime Minister): I stand by my actual statement which was “If we continued to leave the housing market completely unchecked in Auckland and it continued to go up at the rate it’s going up then eventually that would be a bubble that would have to burst.” I am pleased to report that since then there have been a number of important steps to increase housing supply and assist first-home buyers. Consents in the city are the highest in more than 11 years interest rates remain very low and we are supporting more home buyers into their first home. We are seeing some early signs that Auckland house price increases could be moderating.Andrew Little: Is he aware that since he made that statement Auckland house prices have gone up nearly $300000 leaving first-home buyers more indebted than ever?Rt Hon JOHN KEY: I made that statementin 2013 I think so it sounds like a substantial increase but in the time that we have been in Government—or the last few years in fact since that period of time—we have named and set up 120 special housing areas. There have been 24000 houses and sections consented in the first 2 years of the housing accord. We are reforming the Resource Management Act which we are more than happy to get Labour’s support for if it wants to. An extra 80000 new homes are forecast to be built in Auckland in 6 years in 2020. Interestingly as well Massey University’s Home Affordability Report of today showed that the Auckland property market became more affordable over the past quarter.Andrew Little: How does he expect first-home buyers to realise the Kiwi Dream of homeownership when a standard deposit on an Auckland home has nearly doubled from $100000 to $185000 since he became Prime Minister?Rt Hon JOHN KEY: Firstly as the member knows it is possible for banks to lend over the loan-to-value ratio for a certain percentage of the loans they make. Secondly the Government has introduced KiwiSaver HomeStart which as we know for a significant number of New Zealanders is now assisting them in owning their own homes. We also know that interest rates—as opposed to under the previous Labour Government when they were high and expensive—have been dropping dramatically under a National-led Government. The prudent and good economic management of this Government has allowed New Zealanders to enjoy lower interest rates.Andrew Little: How does he expect first-home buyers to realise the Kiwi Dream of homeownership when servicing the mortgage on a lower-end home costs almost half their income nearly 10 percent more of their income than in December 2008?Rt Hon JOHN KEY: I just do not get all of the relevant information but if one looks at interests rates—which were up at 8 9 and 10 percent when Labour was in office and are now significantly lower—what we do know is that the capacity to service a house is actually the lowest it has been in New Zealand in about 50 or 60 years.Andrew Little: Is Fran O’Sullivan correct when she says about him—that is the Prime Minister—that “He is frankly unapologetic about the massive increase in Auckland residential property values which has resulted in many established Aucklanders becoming relatively rich but younger people being locked out of the market.”?Rt Hon JOHN KEY: One learns when one has been in the job long enough that columnists will make their own assessments and write their own comments all the time. I have read some stuff about Andrew Little that frankly I find a bit disturbing—but it is OK. If the member wants to say that every columnist who writes every column is right in what they say it is going to be a very interesting proposition to stand by.