Housing urgent in ‘very big year’: PM

NELSON: Prime Minister Jacinda Ardern might have dubbed 2021 the ‘‘year of the vaccine’’, but she has put fixing New Zealand’s housing crisis at the top of her political todo list.

‘‘We can’t stand by while house prices increase at the unsustainable rates we saw in 2020.’’

Speaking in Nelson during Labour’s annual caucus retreat, Ms Ardern spoke of the ‘‘urgency’’ needed from the Government to ‘‘tilt the field towards firsthome buyers’’.

She said the Government would leave ‘‘no stone unturned’’ in its plans to fix the housing market — a market that has posted 20% yearonyear price inflation.

‘‘The current rate of housing price growth is unsustainable,’’ she said.

‘‘Firsthome buyers are being shut out and rapid rises pose a risk to the long term health of our economy.’’

Her housing plan would be unveiled in the coming months in a number of ways, cumulating in the Budget, where Ms Ardern said there would be a package to ‘‘address housing supply’’

She did not reveal any details, only that there would be a boost in Government building across all types of supply, such as affordable houses.

There were many reasons for New Zealand’s housing crisis, she said, including lack of supply, lowinterest rates and the high cost of building materials.

‘‘There is no silver bullet for fixing the housing crisis, but that is not a reason for inaction.’’

Ms Ardern also said her Government would be making various moves when it came to addressing the demand side issues of the market.

By late February, Finance Minister Grant Robertson would have received, and considered, advice from the Reserve Bank and the Treasury on the housing market.

In November, Mr Robertson asked Treasury to take a closer look at the brightline test — a policy that meant someone who sold their home within five years of buying it had to pay a tax on its capital gain.

There were exceptions, such as if it was a family home.

Mr Robertson has not ruled out extending the test, but he said he needed to wait to see what Treasury staff came up with before making a call.

This appeared to be the stick for speculators, but Ms Ardern also had a carrot which she was dangling in front of firsthome buyers.

Last November, she revealed the Government was looking into adjusting the thresholds around the homestart grants to make it easier for firsttime buyers to get into the market.

The homestart grant enabled firsttime buyers access to $5000, or $10,000 as a couple, towards their first property.

There were various restrictions at the moment, including an earning limit of $85,000 per person, or $130,000 for a couple.

She would not, however, go into detail about her plans for firsthome buyers yesterday.

Housing was not the only issue Ms Ardern focused on during the retreat.

In her opening remarks to MPs, she said 2021 was the ‘‘year of the vaccine’’.

‘‘Our job is to get us through this year and to get us through the worst health and economic crisis the world has seen in our lifetime.’’

This was her Government’s ‘‘top priority’’, she said.

‘‘The Government’s goal is to get the management of Covid19 to a similar place as we do seasonally with the flu.

‘‘In all — we have a very big year ahead of us.’’ — The New Zealand Herald