Auckland housing 'out of control' but no changes needed - Smith

Housing Minister Nick Smith (Getty)
Housing Minister Nick Smith (Getty)

Auckland house prices hitting the magic million-dollar mark won't force the Government to make any sudden moves, says Housing Minister Nick Smith.

Speaking to Paul Henry on Wednesday morning, Dr Smith said he now openly accepts the Auckland housing situation is "out of control".

Auckland housing 'out of control' but no changes needed - Smith


Quotable Value figures released on Tuesday show the average residential property value in Auckland is now $1,013,632 - double what it was at the start of National's time in Government, and up $400,000 since Dr Smith became Housing Minister in 2013.

"The million-dollar thing yes, the seven-figure sum generates a lot of media activity. But in terms of, does it chance the core things that the Government needs to do?

"Look, New Zealand's doing great. Unemployment's low and dropping. We're a safe, stable country. Our population's growing faster than it ever has. My simple message this morning is the Government just needs to keep to plan and grow that housing stock."

He denied it was now virtually impossible for first-home buyers to get on the market, saying they could buy in Christchurch or Wellington.

"They have had flat and going backwards house prices for seven years," he said of Wellington.

"You've got an increase in the last year of about 16 percent - actually, there isn't a crisis in Wellington, particularly when you align it alongside the fact you've got the lowest interest rates in 60 years."

QV stats show Wellington prices grew 2.8 percent in the year to August 2013, another 1.9 percent to August 2014 and 2.4 percent to August 2015 - but jumped 17.7 percent in the last 12 months to $643,986 in the city and $536,065 across the region.

Christchurch is very slow in comparison, up just 3.5 percent since this time last year to $476,317.

For those who need to buy in Auckland, despite the skyrocketing prices Dr Smith's advice is to wait.

"There is massive new supply that's coming on stream… but people need to be patient."

Immigration is at a record high, but Dr Smith says he won't be pushing for the screws to be tightened just to fix the housing affordability crisis.

"I ain't gonna stand at Auckland Airport and say, 'Welcome home Fred - leave your French wife and children at home.'"

Immigration Minister Michael Woodhouse will be reviewing the current immigration settings in the next month with Cabinet, but doesn't expect to the policy to change.