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Keeping the home ownership dream a reality

Posted on Mar 18, 2013

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David-ShearerMost Kiwis dream of owning their own home.

It’s something I was certainly keen to do when I was young. As soon as I’d saved enough for a deposit, I bought an old villa.

It was a first home - not a dream home. It had sinking piles and a sloping floor, but I was happy to do the work to bring it up to scratch so that I had a warm, dry home to call my own.

I want the same opportunity for all New Zealanders - for our children and grandchildren.

But the dream of home ownership is drifting out of reach. One of the biggest barriers for people starting out is the lack of affordable houses.

In the 1960s and 1970s, about 30-35 percent of new houses being built were entry-level homes. Today, that’s fallen to just five percent.

Between 2011 and 2012 there was a 36 percent increase in the number of homes selling for more than a million dollars.

House prices have climbed so high that home ownership in Auckland has dipped below 60 percent for the first time. It’s the same trend in other parts of the country.

The Government says there’s nothing it can do about that. It’s up to the market. But let’s face it, the market has failed.

That’s why Labour will take a very different approach. We will be hands-on and use the power only the Government has to make a difference. We’ll also oversee the largest building programme in 50 years - putting 100,000 families into their first homes over the next 10 years.

It’s ambitious but doable and desperately needed.

These homes will cost around $300,000 to build, on average across the country. They will be a mix of stand alone houses, terraced homes and apartment buildings. But most importantly they’ll be warm, dry, insulated and affordable. Quality homes to enjoy and take pride in.

We’ve already had a huge amount of interest in KiwiBuild from the construction industry. Building firms, architects and designers are excited about the opportunity to create modern, energy-efficient homes.

David Shearer

We’ll use the economies of scale involved in a project of this size to make significant savings in building costs.

That means that even the cost of standalone three to four bedroom houses in Auckland, which are at the moment being built for around $450,000, can be reduced substantially.

We’ve already had a huge amount of interest in KiwiBuild from the construction industry. Building firms, architects and designers are excited about the opportunity to create modern, energy-efficient homes.

We will kick start the programme with a one-off $1.5 billion investment. Because it will be capital investment, it will not affect New Zealand’s path back to surplus, which is a priority for Labour.

As soon as houses are built, we’ll put them on the market and the money we make from the sales will go back into the funding pot to build more. So over time KiwiBuild will be self-funding.

Not only is this plan great for first home buyers, but it will stimulate our economy by creating thousands of jobs and training opportunities.

We’ll also take the heat out of the housing market by introducing a capital gains tax to encourage investors to put their money into job creating businesses, rather than speculating on the property market.

That speculation is ramping up prices beyond what people can afford and pushing rental prices up too.

I am focused on getting our country back into the black and on providing opportunities for all New Zealanders.

Our housing problem won’t be fixed by leaving it to the market or tinkering. It’s time to be active and hands on, to roll up our sleeves and get stuck in and make the big changes needed.

I had the opportunity to afford a house. I want that for everyone else too.

David Shearer is the MP for Mt Albert and leader of the Labour Party.

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