We edited John Key and Andrew Little’s words together into a surprisingly unified speech on the housing crisis.
While I was putting together this impossible quiz, I noticed something surprising: John Key and Andrew Little were starting to make sense. Reading quotes by the pair on the housing crisis – Key’s from a speech in 2007, Little’s from interviews and press releases in 2016 – it was obvious their words were developing a kind of synergy. They flowed off the page, sounding forth with a unity of purpose not often seen by opposing political leaders. Stripped of their usual internecine squabbling, our politicians were even kind of inspiring. More than that, they put forward a real vision for how to solve the housing crisis.
So in the interests of fixing New Zealand’s worst ongoing catastrophe and painting our major party leaders in a different light, I’ve edited their words into a single speech. Key’s words are in blue, while Little’s are in red. Ours are in black. Now without further ado, The Spinoff is proud to host the first major cross-party address on the housing crisis, by Andrew Little and John Key. – Hayden Donnell
Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse. This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities.
Three quarters of New Zealanders under 40 now don’t own a home, many of whom have given up on ever buying a house. Too many Kiwi families can’t see a way to get themselves onto the first rung of the property ladder. They don’t even aspire to owning their own home anymore. We have to turn that around.
The housing crisis is about all of us. It affects young people getting up to their eyeballs in debt for a basic starter home, renting families who can’t save enough even for a deposit, older Kiwis watching their children struggle to get a place of their own, and kids who are bounced from school to school as their parents have to change rentals.
On current trends, the crisis will only deepen. Home ownership rates are predicted to plummet within the next decade. And one of the biggest factors influencing homeownership rates over the next 10 years will be the difficulty young buyers will have getting into their first home.
It’s not just the homeless and people crammed into homes – it’s actually people who are just doing their best to save for a deposit, can’t save, can’t keep up with house price inflation, can’t get their first home. We’ve got to help them out.
Quite simply, not enough new houses are being built in New Zealand. In many parts of the country, increases in demand for housing are now outstripping supply. Economics 101 would tell you that if the demand for housing outstrips supply, then the only way for house prices to go is up, up, up.
You need only look at what that means for a first-home buyer on the average wage buying a median-priced house. In 1999 it took just 42% of their average take-home pay to service their mortgage. It now takes around 81%. That’s after they’ve somehow managed to save up a 20% deposit in the first place. That is a crippling increase.
We can’t keep going like this. If we do, we’re going to be left with a country where home ownership becomes the privilege of just a very lucky few rather than a birthright for most Kiwis.
This problem won’t be solved by knee-jerk, quick-fix plans. And it won’t be curbed with one or two government-sponsored building developments. What this Government must do is come up with a comprehensive housing policy that tackles the crisis across the board. Instead of half-measures and piecemeal policies the priority should be to build affordable houses for people to live in.
We need Government leadership that is prepared to focus on the fundamental issues driving the crisis. It’s well past time for a change. We owe it to the young couples worried they’ll never be able to buy a home, because our housing market is out of control.
We want to ensure that every young New Zealander who works hard and is disciplined about saving can expect to own their own home and thereby have a real stake in the economic future of this country.
New Zealand can be a country that restores the Kiwi dream of homeownership. We can be a country that gives young families a real chance at buying a home.
The Spinoff Weekly compiles the best stories of the week – an essential guide to modern life in New Zealand, emailed out on Monday evenings.