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Govt under fire over $1m house price

NZ Newswire logoNZ Newswire 6/09/2016
Green Party Co-leader Metiria Turei, in a 2016 file photo. © Hannah Peters/Getty Images Green Party Co-leader Metiria Turei, in a 2016 file photo.

One million reasons to change the government is the Green Party's reaction to the news that the average Auckland home now costs more than $1 million.

The latest QV figures released on Tuesday put the average at $1,013,632.

Green's co-leader Metiria Turei says Prime Minister John Key's legacy is a generation of young people locked out of million dollar houses in Auckland.

"Aucklanders wanting to buy their first home now have one million reasons to change the government," she said.

Labour leader Andrew Little says the housing crisis has reached "a scandalous new milestone".

"While the government continues its half-baked, piecemeal policies the Kiwi dream of home ownership is unravelling," he said.

"National has three ministers responsible for housing, and nothing they have done has slowed the skyrocketing house price rises that are locking a generation out of home ownership."

Mr Key told reporters the average price had gone over $1m on the back of very low interest rates and a strong economy.

"I think what it says is that there's a lot of pressure on the Auckland housing market," he said.

"It has been very much a supply issue, but there are a lot of good things happening now - the construction sector is the busiest it's ever been and the council is on board with the Unitary Plan."

Mr Key says averages get blown around for a number of reasons, and markets go up and down.

"Over 30 per cent of all sales in Auckland take place at less than $650,000," he said.

Earlier on Tuesday Mr Key indicated the government would support the Reserve Bank if it decided to use more tools to control house prices inflation, such as debt-to-income ratios.

DTIs limit the amount of a mortgage depending on household income, and the Reserve Bank has been considering the impact they would have.

Governor Graeme Wheeler has talked to Finance Minister Bill English about DTIs but decisions haven't been taken.

"The Reserve Bank is constantly having discussions with the minister of finance exploring options," Mr Key said.

"Historically we have backed him (Mr Wheeler) when he has wanted to introduce other tools."

Labour leader Andrew Little says DTIs, which would impact on first home buyers, would be "a desperate measure".

He's accusing the government of leaving the problem to the Reserve Bank.

"Solving this is going to need a lot more than fiddling around with the finance that people have access to," he said.

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