Government to wait until next year to act on housing crisis, despite skyrocketing prices

There was a significant increase in the number of houses sold in November despite inventory dropping over 16 percent, but the Government is leaving any action on the housing crisis until the new year.

The Real Estate Institute of New Zealand (REINZ) released their data for last month on Friday, which showed house prices have hit new records.

The median national median house price is now $749,000 - an increase of 18.5 percent from the same time last year.

Jacob Jenkins and Jessie Wrigglesworth were able to secure their first home on Friday for $860,000.

"It's been really emotional - an emotional rollercoaster. The budget has definitely had to increase a little bit," she told Newshub.

The auction was the end of what's been a stressful struggle.

"[We] definitely [had] a few shocks of thinking we were going well over what we should've, thinking we were paying a good price - and then it goes for $300,000 over that... those were the really tough ones."

The frenzied housing market prompted Finance Minister Grant Robertson to call on the Reserve Bank for help. 

In November he wrote to Reserve Bank Governor Adrian Orr proposing to add house prices to the central bank's remit.

"The Reserve Bank is only one player in this, but everybody needs to be involved if we are going to make sure there is an affordable housing market," Robertson said.

However Orr declined, telling Robertson the Government is better placed to solve the housing crisis and there's not much the bank can do without him.

Instead, he recommended a new housing agency to coordinate the Government response, and request the Government allows the Reserve Bank to impose debt to income limits - controlling the amount that can be borrowed - relative to income. 

Orr and Robertson were not available for an interview. However in a statement, Robertson thanked the Governor for his response and said he'll consider it along with the advice he's requested from Treasury. 

responding to the urgent crisis will have to wait; Robertson said the Government will make announcements next year.

So while Jenkins and Wrigglesworth can celebrate Christmas with a new home, other desperate first-home buyers just have to hold out hope they might get that big day - one day.