Housing the top issue facing Kiwis despite pandemic and Labour most trusted to solve it

Housing is the top issue facing New Zealanders despite the COVID-19 pandemic and Labour is the most trusted party to solve it - but their support is dropping. 

The latest Ipsos New Zealand Issues Monitor research shows Labour continues to be perceived as the party most capable of handling issues Kiwis are concerned about, but their lead has been falling through 2021. 

In November 2020, 47 percent of Kiwis believed that Labour was the most capable to manage the housing crisis, according to Ipsos, but by October 2021 it dropped to 32 percent, compared to National on 23 percent. 

Despite COVID-19 dominating headlines, more than half - 54 percent - of Kiwis rate housing as a top issue. Health increased from 27 percent in June to 35 percent in October. In third place was inflation, with 31 percent rating it as a top concern, followed by poverty at 26 percent. 

It contrasts to Australia, where housing is ranked as the fourth most important issue at 29 percent. Health is the most important in Australia at 43 percent, followed by the economy at 37 percent, followed by inflation at 30 percent. 

Housing is shaping up to be one of the Government's major challenges, with house price growth showing little sign of slowing down, in part due to lack of housing supply and ramped up demand after the Reserve Bank dropped interest rates to keep cash flowing during the COVID-19 economic slump. 

There are some positive signs, such as record housing consents. In the year to September, 47,331 new homes were consented, up 25 percent. 

The Government unveiled a package of measures earlier this year to try and curb house price growth, by tweaking income caps for state deposit assistance and launching a $3.7 billion fund to pay for housing infrastructure. 

And in a controversial move, tax deductions on interest costs for rental properties were removed, after it was revealed investors made up the biggest share of buyers in the housing market.

But the latest New Zealand Property Report found that 10 regions, including Auckland, have hit record-high average asking prices. The average asking price in Auckland was up 21.3 percent to $1.2 million. 

Real Estate Institute data shows the number of houses available to purchase in New Zealand is the lowest it has been in 14 years. And the homes that are available are too expensive for many, with prices across the country up nearly 29 percent.

Last month, Labour and National united in a rare display of unity to help solve the housing crisis by forcing councils to build up in urban areas and allow more subdivisions.

But National is now chipping away at Labour's heels, with Ipsos research showing Labour's lead is narrowing. Newshub polling in July last year found Kiwis trusted Labour more than National to run the economy. But Ipsos found that in Auckland, National now has an edge over Labour on the economy, cost of living, crime, transport and taxation. 

Even support for the Government's COVID-19 response - which is widely considered to be behind Labour's historic election win - is dropping. 

The Government's performance rating soared during the first save of COVID-19, with a score of 7.6 out of 10 in May 2020, according to Ipsos. But since November 2020, it has "consistently declined", with a score of 6.2 out of 10 in October this year. 

The results align with the latest TVNZ poll, which showed Labour down 2 points to 41 percent - a significant drop from 50 percent after the election. Newshub's most recent poll in August showed Labour down 9.7 points to 43 percent.

"I still feel really confident in that vote of confidence we have from New Zealanders for us and for our traditional support partners," Prime Minister Jacinda Ardern said earlier this week. 

"What I would say is that it's clear we're in a really tough time in New Zealand and we are having to make tough decisions. But from here, you can see that pathway to the new strategy where people will see greater freedoms and a real change in the way that we continue to manage COVID."

The Green Party is seen as most capable in managing climate change and environmental pollution and water concerns while the Māori Party is preferred for managing issues facing Māori.