FNDC’s Felicity Foy weighs in on housing crisis debate
FNDC Councilor Felicity Foy is calling on the government to introduce a new Home Buyers Bill to help people get into the housing market. Photo / Provided
A Far North District councilor is calling on the government to reintroduce an old Home Buyers Bill to help first-time buyers access the housing market.
FNDC Councilor Felicity Foy has brought an end to the current housing crisis, saying the government must bring in a Home Buyers’ Bill such as the Child Benefits Bill 1964, to ensure that more people can access their first home.
“The Family Benefits (Home Ownership) Act 1964 introduced the possibility of ‘capitalising’ on family benefits, which allowed a family to take the full amount that would be payable for a child (up to at age 16) as a lump sum, provided they use it to buy their first home,” Foy said.
“My grandparents bought their first house in Kaingaroa using the government-subsidized Child Benefit, which could be paid in advance and used as security.
“‘Family allowance’ was paid to families between 1945 and the mid-1980s and many families with very low family incomes used this government subsidy to access property.”
Foy said that unlike the current situation, most families at the time could afford to pay a mortgage each week, but the barrier to becoming a homeowner was often the required amount of a security deposit.
Foy said it was something the banks and central government had the power to control and change.
“The saddest part of the current housing crisis is that more homes won’t be built overnight. Therefore, it’s going to get worse before it gets better,” Foy said.
“Over the last 10 years I have seen the cost of housing exacerbate, both for the existing housing stock and also for the cost of construction.
“In 2010, homes in Kaitaia were for sale for as little as $100,000. Now housing here in Kaitaia at its lowest price is more like $300,000.
“The cost of construction has also increased so much that in addition to the cost of land and on-site infrastructure, the average cost of new construction and land will now be around $700,000 (or more). ).”
The latest figures from Core Logic confirm Foy’s claims, with the average home value in the Far North rising 11.2% in the last three months of 2021, reaching $751,203.
Each year, home values have increased by 35.7%, well above the national average of 28.4%.
Northland’s residential real estate market continues to soar more broadly in the summer, with average home values increasing even more in the three months to late December than in the previous period.
Values rose almost as much in Whangarei District, where average home values rose 8.6% over the past three months and 30.2% for the year as a whole to $827,836 .
In Kaipara, the average home value is $906,557, 14% higher than three months ago and 37.7% higher than the same period last year.
This stems from national figures released for the last quarter of 2021, which show the average home value increased by 7.8%, compared to 6.9% quarterly growth in November, with the national average value standing at now at $1,053,315.
First Home Buyers Club director Lesley Harris told RNZ Morning Report last week that the current housing market was incredibly difficult for residents of major cities and provinces.
“I think we’ve known that for a long time…we don’t want to downplay how incredibly difficult it is. That said, we’re still seeing people move into their first homes, but there are a lot of trade-offs.”
She said some of those compromises included people buying houses in groups, bringing in boarders and buying properties on the outskirts of major centers.
“The Kiwis are determined to get into their first home and they will do whatever it takes to get there,” Harris said.
Although homes tend to be cheaper in provincial areas, the lack of well-paying job opportunities in these areas could make this an untenable option for many first-time home buyers.
“You have to consider that you have to live and earn an income, so generally in those provincial areas there aren’t as many opportunities for the higher paying jobs, so it’s not as easy as it looks.
“We just see it getting more difficult and people getting very frustrated.”
Recent changes to the Credit Agreements and Consumer Credit Act have also made it harder for first-time home buyers to get a loan from the bank.
As a result, banks were now watching the spending habits of potential first-time home buyers more closely.
Harris said it’s now even more important for first-time homebuyers to settle debt and reduce expenses before applying for a mortgage.
“People need to understand that if you have $9,000 in debt, student loans are considered differently, but $9,000 in debt, which in our recent survey was the average, is going to reduce what you can borrow by 70 $000.”
Last week, Social Credit announced that it would ask Kiwibank to lower its lending rates, particularly for first-time buyers and small and medium-sized businesses.
The statement said that as a bank owned by all New Zealanders, Kiwibank has a responsibility to consider social factors rather than just commercial ones.
Social Credit chief Chris Leitch said the vast majority of Kiwibank customers were retirees, individuals, small businesses and the most vulnerable.
According to Leitch, under Kiwibank’s current mode of operation, its shareholders, the New Zealand Super Fund, the Accident Compensation Corporation and NZ Post effectively required Kiwibank customers to pay their own superannuation, compensation for accident insurance and government services through dividends from NZ Post.
He said that while the Super Fund and the ACC should be looking for good returns on the money they were to invest, that investment should be in shares of productive New Zealand companies, allowing them to access funding at lower cost for development than that available through bank borrowing. .
“Similar to how other commercial banks do, Kiwibank creates the money it lends to borrowers out of thin air, by simply typing numbers into a computer keyboard,” Leitch said.
“He doesn’t lend the money that people here deposit with him, so he could easily lower his lending rates.”
Leitch also held the government accountable and said it should reverse the 2016 decision to have the Super Fund and ACC buy 45% of Kiwibank and that the shareholding should instead be taken over by the Reserve Bank. .
According to Quotable Value (QV) Operations, a flood of recent new listings helped dampen home value growth somewhat, but failed to stop it completely.
QV chief operating officer Paul McCorry said it was fair to say that 2021 had been quite an unusual year for the property market and never in recent times had there been so much external intervention in a market real estate.
He said it was also extraordinary that in the midst of a global pandemic, the market saw record growth of 28.4% nationwide.
“It became pretty clear towards the end of the year that this level of growth was not going to continue indefinitely as we started to see a decline in the quarterly growth rate,” McCorry said.
“The most likely lever to lower this rate in the future is to raise the official cash rate (OCR), which in turn raises the interest rates that banks will offer future homeowners.”
With updated information from RNZ.