Labour would change LVR policy

Labour would change the Reserve Bank's new loan to value ratio (LVR) policy that limits retails banks' ability to lend low equity mortgages if they win next year’s election.

Speaking on TV3's "The Nation" Labour's housing spokesman Phil Twyford said Labour would help first home buyers instead of big corporations the Government had helped.

"National will intervene for Warner Brothers, it will intervene for Rio Tinto, it will intervene for Chorus but it will not intervene for first home buyers, we will we are on the side of first home buyers," said Mr Twyford.

He did not blame the Reserve Bank for setting the LVR policy but lays it fully on the Government.

"You can’t blame the Reserve Bank here they have been pushed into a corner by National's utter incompetence to managing the housing crisis," said Mr Twyford.

He said Labour would solve Auckland’s housing crisis by building ten thousand new affordable houses every year for the next ten years to increase supply along with introducing a capital gains tax on investment properties if they were in power.

"We will build ten thousand affordable starter homes every year for ten years, we will tax speculators and that will take some speculative heat out of the market ," said Mr Twyford.

Property commentator and properazzi.co.nz founder Alistair Helm’s suggested the Government look at overseas solutions to address Auckland’s lack of housing supply.

Auckland house market turning - pundit
"One thing I like and one thing I'd like the Government to look at is the U.K new builds programme, they've got a combination of targeting new construction saying if you buy a new house then the Government will underwrite that balance of the deposit that allows you to buy at ten per cent of even five per cent and that double whammy I think is a good initiative that the Government in this country should look at," said Mr Helm.

He predicted Auckland house prices to fall with the expected interest rate rise by the Reserve Bank in the near future.

"Interest rates will rise, people need to be cautious about what they buy and how much they borrow but the reality is I think we starting to see the turning of the market even in Auckland, lets remember this housing crisis is not New Zealand wide its Auckland and I think we've seen it in the sales beginning to slow up a bit and prices are not hitting the peaks,"

"We are not seeing as much growth in price, we're beginning to see a tailing off in the growth in prices," said Mr Helm.