Smith says only 1.2% of NZ's housing stock owned by foreigners
PLUS: Promises to fix "overheated" Auckland housing market by next election.
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Hawke’s Bay
Nick Smith has committed to improving the Auckland housing shortage by the next election.
Independent Crown entity agency the Productivity Commission says Auckland is short 32,000 homes, and estimates the number will increase to 60,000 by 2020.
Mr Smith insists foreign buyers are “not having a significant effect” on the Auckland housing market and rejects Labour’s claims offshore Chinese buyers could be buying as much as 30% of houses.
“I don’t believe that for a moment … I don't actually think fair-minded New Zealanders are going to make a judgement on the basis of people's Chinese-sounding names," Mr Smith said.
Labour's Phil Twyford released three months of Barfoot & Thompson sales data that indicated although 9% of the population in Auckland is Chinese, buyers with Chinese-sounding names account for 40% of sales. Mr Twyford says this indicates 30% are foreign buyers.
Last year, Mr Smith estimated 1% to 2%.
He stood by that figure during an interview on The Nation, saying, "We've got legislation before Parliament. I'll tell you what information we do have. We do know that there are 25,000 out of New Zealand, non-residents claiming either deductions for renting a house or income from renting houses, so that's about 1.2% [of] the total housing stock."
He added, "And that number has been quite consistent for about the last 15-20 years. We accept that that information's not imperfect. That's why at Budget time we introduced legislation into Parliament that is going to give us far better information. We don't mind having a discussion, quite properly, about the appropriate levels of foreign ownership in New Zealand but what we're not going to have is one of these cheap, ill-informed debates that targets one ethnic group. That's not fair. That's not the New Zealand way.
Asked if he is keeping his promise to make buying a house in Auckland easier when prices have gone up $3000 a week in the past year, the building and housing minister said, “No. Quite clearly, the Auckland market is overheated. Quite clearly, house price increases of 20% in one year are not sustainable."
The problem of home ownership goes back 30 years, he said.
From October foreign buyers will be required to register with IRD and open a New Zealand bank account.
The government is attempting to open more special housing areas in Auckland, and now lets first-home buyers tap KiwiSaver money for a deposit.
"When I became minister, we were building 4000 houses a year in Auckland. We're now building 8000 a year," Mr Smith said."It's easy to sit in these studios and talk about building another thousand houses. That is a power of work to create the sections, the subdivisions; to get the builders, the plumbers and everything else."
Asked to predict where the Auckland house shortfall was headking, Mr Smith said, "We'll have to mark it around what is the rate of increase, you know? We've put out an accord with the Auckland Council. 9000; year one, we actually got 10,500. Year two, out to 13,000 homes. Year three, out to 17,000 homes; working very hard at opening up those ladders."I've seen three or four different figures between the Productivity Commission, my own ministry and the like. It's not exact, but what I do know is this – in Christchurch, we had house price inflation of 15%, 18% several years running. We lifted the house build rate from 1000 a year to 4000 a year. In the last year in Christchurch, house prices have only gone up by 2%. Rents have dropped by 5%. What does that tell us? Supply matters. Arguments about Chinese-sounding names is not going to make a vote of difference to the young families we want in homes."
Iwi role in water management
Separately, Mr Smith said National is “open” to iwi having “input” into governance of New Zealand’s lakes and rivers alongside councils and to discussion about improving water management.
He said he was encouraged that “iwi are not looking for a financial cut.”
He rejected Sir Mark Solomon’s claim he acted contrary to the Treaty of Waitangi’s spirit of cooperation when he didn’t talk to Ngati Whatua about first right of refusal on Crown land.
“The first right of refusal is held by a limited partnership of 13 iwi. And so we sat down with the party that we owed the legal obligation to," he said.
Watch the full interview here.
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Smith says only 1.2% of NZ's housing stock owned by foreigners
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