Housing crisis or 'building boom'?

Phil Twyford (file)
Phil Twyford (file)

Is New Zealand in the midst of a housing crisis or "building boom"?

Housing Minister Nick Smith says it's the latter, and it's driving the price of building materials in opposite direction to what the Government promised two years ago.

Almost everyone else -- including Government support partners ACT, the Salvation Army, Opposition parties and even the Employers and Manufacturers Association -- is in no doubt there is a serious problem, and it's only getting worse.

"I think when Auckland has some of the most unaffordable housing in the world according to numerous international reports, and when we see families sleeping in cars, garages and campgrounds, I think it's pretty clear we do have a crisis," Labour housing spokesperson Phil Twyford told RadioLIVE's Mark Sainsbury on Tuesday.

Though there have always been homeless and people living in cars and garages, he says it's now reached a tipping point.

"You can't turn on the radio or the TV, or open a newspaper -- it's housing, housing, housing, it's falling rates of home ownership, people feel miserable about that...rents are going up, there's a shortage of 40,000 houses. It all seems to be falling apart at the seams."

To prove the housing crisis is no longer a fringe issue, he pointed to recent comments by Kim Campbell, Employers and Manufacturers Association (Northern) chief executive -- "hardly a red-hot socialist" -- that it was time for the Government to step in and start building.

"Clearly at the bottom end there needs to be something done," Mr Campbell told RNZ. "We have had 50 to 60 years [of doing it] and suddenly we've decided there isn't a need, and one wonders. Whatever is happening now is not working."

Mr Twyford says Labour's Kiwibuild policy will bring a return to home ownership rates unseen since the 1980s.

In addition to homelessness, unaffordability of first homes and rising rents, today a new angle emerged -- the costs of building a house are rising.

Two years ago the Government removed tariffs on some building materials, saying it would knock $3500 off the cost of building a home. New figures released by the Ministry of Business, Innovation and Employment show just one product -- plasterboard -- has increased by that amount.

Dr Smith says it's because of increased competition caused by a "building boom", while Mr Twyford believes it's a result of "deals, rebates and incentives for the retailers" by market leader Winstone, owned by Fletcher.

He wants more powers for the Commerce Commission to "bust open the building supplier's market and crack down on all the anti-competitive rorts that mean Kiwis are paying so much more for building materials than they should do".

Mr Twyford also wants the establishment of a buyers' cooperative to compete with Winstone.

"It can't go on the way it is."