State house subsidies not the answer says Banks

“National’s plan to subsidise the sale of state houses to first home buyers in provincial areas will do nothing to tackle the housing affordability crisis which is occurring in our biggest cities, ACT Leader John Banks said today.

Housing Minister Nick Smith today unveiled a plan which would see around 400 state houses located in provincial areas sold to first home buyers. The buyers could receive a direct subsidy of up to $20,000 to purchase the homes.

“Vacant state houses should be sold outright, with no subsidy, Mr Banks said.

“It is a very poor use of tax payers’ money to subsidise first home buyers in areas where the housing affordability crisis is the least pronounced.

“People struggling to buy a modest home in Auckland or Christchurch will feel aggrieved that those in much more affordable areas are being given a hand out by the Government.

“In addition, a plan that only focuses on the state house sector fails to address the issue of rising house prices in our biggest cities.

“The majority of people live in owner occupied housing or private rentals. That is the sector of the market that needs to be tackled.

“ACT’s Freedom to Build policy would significantly increase the supply of land in areas like Auckland, so developers can start responding to the high demand and build more houses.

“A core part of this policy is to significantly reform the RMA so that people can more easily subdivide their land and build on it.

 “We should not be giving tax payer subsidies for people to buy their first homes in relatively affordable areas. We should be removing the current restrictions that are stopping enough new homes be being built”, Mr Banks said.