Property developer Hugh Pavletich has taken Real Estate Institute national president Howard Morley to task for calling on Labour and National to 'incentivise' first home ownership with subsidies.
Mr Morley had been speaking at the recent annual meeting of the Institute in Napier when he claimed homeowners were being overlooked in the election lolly-scramble. He said housing should be one of the highest priorities of any government because it was also effectively a retirement savings scheme.
But developer Mr Pavletich said 'throwing taxpayer money at the problem is irresponsible and would merely feed through to higher median prices which were already beyond the reach of many potential home buyers.
'I'm baffled as to why Mr Morley thinks such a policy would be in the long term interests of Institute members anyway. I just don't think he's thought this through,' Mr Pavletich said.
Mr Pavletich's own view is that the key to home affordability is making it easier to source new land supply. He believes this will be achieved by an overhaul of the Resource Management Act to pave the way for more greenfield developments. Land supply was more significant than immigration or interest rates he said. It should be an immediate priority for any new government because the housing market is a key driver of the economy and retail spending, he said.
Mr Pavletich cited a study he has been involved in promoting called the Demographia International Housing Affordability Survey 2005, which found that the cost of new homes was inexorably rising to between four to six times the average annual wage, compared to less than three a decade ago.
The study found the problem was worse in New Zealand and Australian main cities than in places such as Houston where there are more liberal land development policies.
Mr Pavletich pointed to the 'Australian first home buyer fiasco when taxpayer subsidies quickly fed through to even higher proper prices.
'People should not be required to pay any more than three times their household income to secure their participation in the Kiwi dream of home ownership. This was the situation in New Zealand and Australia 30 Years ago, before local governments for ideological reasons started embarking on strangling the urban land supply and driving section prices into the stratosphere,' Mr Pavletich said.
Meanwhile Mr Morley compared the lack of help for homebuyers with proposals for interest free loans for students.
'Useful assistance to achieve first home ownership would be of comparatively lesser cost with considerably more benefit to our country.'
Need help or
support?
