PHOTO: Nicola Willis. (Source: Q and A)
National’s finance spokesperson, Nicola Willis, has expressed her desire to make housing more affordable. However, Grant Robertson, her counterpart from the Labour Party, contends that her party’s policies would have the opposite effect.
The housing affordability is typically measured using the house-price-to-income multiple, which calculates the ratio between the median house price and the median annual household income. Both Willis and Robertson have agreed that a median multiple of 3 or less is widely regarded as affordable.
Currently, the ratio of the median house price to annual household income stands at approximately 7, whereas it was 6 in 2017. Willis criticized the Labour Government’s track record, stating, “They promised to address the housing crisis, but they clearly fell short.” She expressed her goal of seeing this ratio decline, although she didn’t specify a target median multiple. Willis did emphasize her intention to significantly lower income levels.
In response, Robertson defended his government’s accomplishments, highlighting the consent for over 200,000 houses and the addition of more than 13,000 new public homes since 2017, including over 11,000 new builds. He acknowledged the challenging circumstances faced during this period.
Willis argued that the state housing list had grown significantly under Labour, to which Robertson explained that this was due to accurate counting. He accused the previous National Government of making it difficult for people to get on the housing list initially, a claim Willis disputed as misinformation.
Robertson stressed the importance of house construction, regardless of these debates, emphasizing that National had sold houses, whereas Labour had been building them. He expressed concern that National’s election promises, such as restoring interest deductibility for landlords and reducing the brightline test to two years, would negatively impact first home buyers. In response, Willis argued that a well-functioning rental market was crucial to prevent people from ending up on the social housing waiting list due to steep rent increases. She believed that National’s rental policy would encourage landlords to reconsider raising rents excessively if interest deductibility were restored.