Auckland just climbed a place up on an international rating, but it was for the wrong reasons. Auckland is now the fourth most unaffordable city in the world. The median house price has risen to $830,000 but the median income is $83,000, creating a price : income ratio of 10:1. Most Indian New Zealand families already know this only too well. Although home ownership is a cherished New Zealand expectation, fewer and fewer families can afford to buy their first home. The proportion of home ownership is the lowest it has ever been.
There needs to be urgent action. A good place to start would be for the government to admit there is a crisis. Rather than the government selling off state houses, we should be building many more. The private sector will not build enough affordable houses by itself—government investment is needed. The Green Party’s ‘Home for Life’ policy would build 10,000 affordable homes under a rent to buy scheme, with weekly payments capped at 30% of income. The policy would also work with housing associations and community groups to build a further 5,000 energy efficient homes and keep the costs low to tenants.
But building more houses is not the whole story. There has been too much money bidding up the price of real estate in Auckland, and increasingly in other cities. A major reason is because speculators and developers have been making tax-free profits. Investment in real estate in New Zealand dwarfs investment in the productive economy. In order to ensure that wage and salary earners are not disadvantaged, the Green Party would implement a comprehensive Capital Gains Tax, to level the playing field for all income earners.
Money is also flowing into real estate from organised crime and drugs, often through tax havens, according to recent investigations by the police and a report from the international Financial Action Task Force. New Zealand has become a route for money laundering because of its minimal regulations, and real estate is the favourite sector, according to the police research. The government has been dragging its feet on developing laws to stop dirty money pumping up house prices.
The Green Party is committed to ensuring that all New Zealanders can afford a warm, dry and affordable house. This is election year and voters will have their opportunity to find out more.