Housing campaigner predicts spiralling house prices will be Key's 'Waterloo'
Affordable housing campaigner Hugh Pavletich has predicted house prices will be so high on the eve of the next election they will be "Key's Waterloo".
By the next election, Pavletich said the median house price would be more than 12 times the median household income.
The current figure was just over ten, and when Housing Minister Nick Smith was appointed the median multiple in Auckland was 6.7.
Pavletich tracks the median multiple for cities in New Zealand and across the world providing a comparative measure of how affordable homes are to ordinary families.
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Pavletich was not optimistic that the coming year will see a slow-down in prices rises in Auckland.
"It will be John Key's Waterloo," he said.
"We are careering towards a multiple of 12 by the time of the next election this time next year."
"We voted him in in the 2008 election to deal with the problem and he promised to do so. Yet now we are sitting on a multiple of 10.2 and heading to 12 because of the government's sheer incompetence in dealing with the issues."
In 2007 when campaigning to get into power, Key was clear there was a housing affordability crisis.
In a speech to the New Zealand Contractors Association, he said there was a "home affordability crisis" attacking Labour for its failure to act, especially to free up land for building on.
"If we want to make houses more affordable for first-home buyers, we need more houses to be built as cost-effectively as possible," he said.
"National's plan for housing affordability tackles these supply-side problems in two main ways," he said. "First, by freeing up the supply of land and secondly by dealing with the compliance issues that drive up development and building costs."
Pavletich said not enough house-building was happening on the fringes of Auckland.
"I just don't believe they are hitting the fringes hard enough to bring the multiple down."
While he is not confident in the short-term, Pavletich does not believe prices this high will be "the new normal" that New Zealand has to live with forever.
"These prices have to come back. We just haven't seen the prices top out yet because of the sheer sluggishness of the political response to the crisis," he said.