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Affordability efforts need to broaden focus: ANZ

ANZ says too much focus in the housing affordability debate is being put on a shortage of supply.

Monday, August 20th 2012, 12:00AM

by The Landlord

It says any effort to make housing more affordability needs to look at lots of factors, including improving the income side of the equation.

In its latest housing market report, the bank’s economists say home ownership rates in Auckland have fallen by more than the national average and in most places around the country house prices and rents have been rising faster than incomes.

“There is clear evidence of a growing intermediate housing market where working households cannot afford to buy at the lower-quartile house price.”

There has been a lot of focus lately on the shortage of available housing, and this has been cited as a reason for rapidly rising prices, particularly in Auckland.

But ANZ said freeing up land for new builds to improve supply couldn’t be seen as a one-size-fits-all solution for housing affordability throughout the country.

“There are stark regional differences with the supply of available housing not always where it is needed.”

Auckland, Wellington and the Bay of Plenty are the main areas with a lack of housing supply. But that hasn't meant prices have been on hold in other areas.

“Despite regions outside Auckland being adjudged to have had an excess supply of dwellings over the last 15 years, these regions have tended to experience higher property growth (up 123%) than Auckland (11%), which has a housing shortage.”

ANZ says housing affordability could be improved by making Kiwisaver compulsory and increasing New Zealand’s reliance on consumption-style taxes.

“On the face of it, this sounds like a tough-love story for housing. It’s not. Housing’s attractiveness as an investment will be ultimately determined by its foundations. A nation built on excessive consumption and a persistent current account deficit is not a solid foundation.”

And as well as bemoaning increasing prices putting houses out of reach, ANZ says more focus should be put on improving New Zealanders’ incomes. This could be done, it says, by unlocking the country’s natural resources, driving productivity growth, offering tax incentives for research and development work, maintaining a commitment to limiting inflation,  attracting foreign investment and focusing on producing the skills the country needs.

“The issues in regards to housing affordability are far more complicated than the current fixation with a shortage of housing stock acknowledges.”

« Property market consolidating: ANZFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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