Hard times for home buyers
In the second part of a series looking at housing issues James Ireland meets a baby boomer who says it's never been easy to get on the property ladder.
It may be hard for people to buy their first home but that's nothing new, Gary Osborne says.
The 66-year-old from Te Atatu bought his first home in Auckland in 1967 at the age of 21.
"Back then there were government-backed home loans but unless you were married it was next to impossible to get one. After a lot of work I managed to buy a house for $8500 with a $500 deposit," he says.
"That was a huge amount of money for a 21-year-old to come up with."
Mr Osborne's annual wage as a high school teacher was $1760.
"I bought a house as soon as I got the loan approved but it was at 8 per cent interest whereas if you were a married couple you could get a Housing Corp loan at 3 per cent," he says.
"I feel for young people these days. I look around and I have real concerns about how a person in the same situation I was in is going to buy a house.
"The cost of living is very high, making it hard to save for a deposit and the market is flooded with buyers primarily because there is a lack of property.
"I think people need to be firmer with banks and push harder to get a good deal. If the bank turns you down you have to ask why," he says.
Labour's New Lynn MP David Cunliffe says more government intervention is needed to help curb the housing crisis in Auckland.
"I think Kiwis have had a gutsful of the Government just sitting there watching from the sidelines. One of the things that makes Auckland's housing market problematic is that it's very cyclical and at the moment house prices are rising again and the rest of the economy is flat."
Mr Cunliffe says a capital gains tax would stabilise the market and remove the peaks and troughs in house prices.
"At the moment a lot of people invest in property because they pay no tax on their profits. A capital gains tax would make it more appealing to invest in the productive sector rather than housing. This will also help our businesses by giving them the capital necessary to grow," he says.
Housing Minister Phil Heatley says housing has always been a favoured investment option for New Zealanders.
"Landlords provide housing for hundreds of thousands of Kiwis. If they didn't, the taxpayer would have to and so we have to take care in ensuring beneficial property investment. Making sure there are options for first-home buyers and others is the first priority," he says.
The Salvation Army report Adding it all up: The political economy of Auckland's housing says Auckland Council and the Government need to intervene.
Salvation Army senior policy analyst Alan Johnson says over the past 30 years property speculation has led to some growing rich and others living in appallingly overcrowded situations.
The report recommends establishing an affordable housing agency funded by the council and the Government to ensure future housing needs are anticipated.