- Just 11% cite supply as a leading cause of New Zealand’s housing crisis
- More than a third (35%) blame investors and 25% blame either record total migration and an influx of foreign buyers
- Almost 6 out of 10 (57%) support the idea of debt to income ratios
The release of BNZ Financial Futures Research shows that those New Zealanders who are concerned about the housing situation (72%) blame investors and immigrants for the country’s housing issue, and while current attempts to solve the problem, while welcome, are perceived to have little impact. More than a third of New Zealanders (35%) blame investors who are motivated by profit as the biggest cause of the country’s housing problems. More than one in ten (13%) say foreign buyers are the issue, and the same number again cite total net migration (new immigrants, people returning to New Zealand or not leaving) as the main causes.
Anthony Healy, BNZ chief executive, says understanding the issues around housing in New Zealand, especially in Auckland, is complex though admits he was surprised that so few people called out supply as a critical issue.
“It is certainly easier to focus in on migrants and investors as the main issue – they are visible and clearly part of the demand side – but it is important we have a balanced debate here, and take the time to understand the supply side pressures as well,” Mr Healy said.
“Many of us – banks, developers, builders, Auckland Council – who are involved day to day in the sector, need to do a better job of communicating the bigger picture and what needs to be done to increase supply. With the Unitary plan for example, I fear too many Aucklanders were concerned about the potential impact on their own back yards, rather than the future of Auckland and its importance to the prosperity of New Zealand.”
The BNZ Financial Futures research also examined views on the new lending restrictions, which are designed to make it tougher for investors to buy new properties. Respondents were broadly supportive of loan-to-value restrictions (LVRs) with 65 per cent saying they were fair, yet a greater proportion (83%) confess they don’t think LVRS will have a substantial impact on housing.
In addition, respondents were asked about potential new restrictions, including a debt-to-income ratio, where borrowing is limited to household income multiplied by a set amount. Again, respondents were supportive with 57% agreeing they’re fair, and only a third thinking it will have any impact on rising house prices.
“I’m not surprised that at first glance, the vast majority are supportive of debt to income ratios – I think any measure that is seen to be targeting investors would go down well with those who aren’t investors,” Mr Healy said.
“But it’s important to stay focussed on the fact that moves by the Reserve Bank are predominantly conservative tools designed to de-risk the banking sector and BNZ will always work constructively with the Reserve Bank.”
“Ratios can have a real impact on first home buyers who may be on lower incomes when compared to their potential future earnings.
There is no silver bullet to the housing affordability challenges but there are positive signs on the horizon including moderating house prices, more supply coming on and innovative proposals to provide more affordable housing stock.”