2. Housing Market—Value of Housing StockGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceHousing Market—Value of Housing Stock2. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Has he read the latest Reserve Bank M10 Housing release and if so can he confirm that it indicates that the value of New Zealand's housing stock as at the end of June this year was valued at $959 billion or 381 percent of nominal GDP?Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: To answer the first part of the member's question: yes and I would point out that the M10 series also indicates that investment in residential housing has achieved its highest recorded value in the 26-year history of the M10 series at $4 billion and has nearly doubled since 2011. It shows that house prices almost doubled in the 9 years to 2008 and that house price growth has moderated somewhat since then. I would also refer the member to the Reserve Bank's M5 series which shows the New Zealand economy growing around 3.5 percent in real terms in the year to June having climbed out of a recession that started when that member was a staff member in the previous Labour Government. To answer the member's second question: yes.Grant Robertson: Can he confirm that the figure of 381 percent of nominal GDP dwarfs the peak of 210 percent of nominal GDP that the US housing market had in 2007 just before that market crashed?Hon STEVEN JOYCE: No I cannot although I do understand that the member is sourcing his analysis from a newsletter. But the simple point is that asset values in housing are high around the world at the moment so in terms of New Zealand we are not that unusual and the reason for that is because of the very low interest rates that are being experienced across the world. The member can pretend that that is not the reason for it but that is a very significant part of it.Grant Robertson: Can he further confirm that each month last year the value of the housing stock inflated by $18 billion nearly outstripping the total increase for GDP in that period?Hon STEVEN JOYCE: To the extent that those two things are comparable then yes I can confirm that that is probably the case. But again the member needs to look at the reasons why and also look at the serviceability of that and I refer him back to Treasury's September monthly indicators report for some comments on the serviceability of that debt. Also in terms of why it is happening I would point out to him that around the world we are experiencing record low interest rates so people are able to service higher mortgages than they were perhaps when we had rampant inflation back in 2008.Grant Robertson: Would he describe New Zealand's housing stock as (a) overvalued; (b) ballooning and unsustainable; (c) a risk to our economic stability; or (d) his usual response: Meh."?Hon STEVEN JOYCE: I think the Minister of Finance has found that leaving the hyperbole to Mr Robertson is normally the best way of dealing with things. In terms of current house prices they are higher than usual. They reflect the strength of the New Zealand economy they reflect the comparative strength relative to other parts of the world and they reflect the very very low levels of interest rates. Yes the need to boost supply—the Government is boosting supply and that is having a big impact over the next period—Richard Prosser: How many houses are you building?Hon STEVEN JOYCE: Thousands and thousands and thousands.Grant Robertson: Does he take any responsibility for allowing the New Zealand housing market to get so out of control on his watch through his Government's failure to crack down on speculators and failure to support the building of an adequate supply of affordable housing or is it all just someone else's fault?Hon STEVEN JOYCE: I think we have just had a window into the mind of Grant Robertson who once again believes that finance Ministers should control every part of every market in the world. The reality is Mr Robertson you are whistling in the wind if you think you can control world interest rates. We can take steps to improve the supply of housing and that is exactly what we are doing but in terms of low interest rates Mr Robertson is whistling in the wind.Grant Robertson: Is it not time for his Government to support an economy built on improving productivity through more research and development higher skills and innovation rather than relying on the sandcastle that he has built on growing debt and speculation in housing?Hon STEVEN JOYCE: The member was obviously not listening to question No. 1. I point out to him that in question No. 1 New Zealand's high-tech sector has just posted a $1 billion increase in turnover in the last year that it is investing more and more in research and development and that its exports are approaching $7 billion. The member needs to go and find some talking points based in fact."