English: Buyer beware in Auckland housing market
The Finance Minister has a message for first-home buyers -- be wary of the market for now.
The Government on Thursday announced its National Policy Statement on Urban Development which would, among other things, open up more land for housing and tie supply to population data.
But it will do next to nothing to alleviate the pressure on the Auckland housing market in the short term.
Finance Minister Bill English says the solution to bringing down prices in Auckland was never going to be a quick fix.
"There's no immediate tool to deal with the house prices in Auckland. It's never been immediate. It's always been a bit of a long game to get the supply when we're dealing with a perfect storm of demand," he said.
He also had some advice for first-home buyers as well as others looking for property.
"Right now they do need to be careful of buying in what could be close to the peak of the market when interest rates are really low.
"They, like any other buyer, should be careful about the risk they're taking buying into a fast-rising market at very low interest rates."
Mr English says it's inevitable interest rates will go up.
"It's just a matter of when. It might be next year, it might be two or three years away."
He says discussions have begun with the Reserve Bank about loan to debt ratios.
Labour's housing spokesman Phil Twyford says Building and Housing Minister Nick Smith has been talking a big game ahead of the policy release.
"They promised a bazooka, and all we ended up with was a pop gun."
He says there's little in it that will help young families getting into their own home.
Think tank the New Zealand Initiative says while the statement is a step in the right direction, it ignores the problem of infrastructure.
"The reason councils trickle out land supply for housing is that infrastructure is costly, and it is existing residents that have to carry these costs upfront," said research fellow Jason Krupp.
Youth environmental group Generation Zero is largely supportive of Dr Smith's plan, but they think more needs to be done.