Brooke van Velden: New Zealands home ownership dream has become a nightmare


It’s harder than ever to buy a home in New Zealand.

I heard from a recently separated dad this week who’s been struggling to get a mortgage together to buy a new home for himself and his son.

He’d found the perfect three-bedroom property, close to work and within range of schools, with even enough land to grow a small garden. His son loved it. He loved it. The best news is that he can afford the 20 per cent deposit needed to secure it.

But he still can’t buy it. The holdup is trying to get mortgage approval from the banks. He’s got a steady job and has trimmed down weekly costs but says it feels like he’s been “put in the too-hard basket”.

“If I can’t get the mortgage on this house, it will cost me more than a mortgage to rent something similar. The market will keep going and I’ll never be able to get my own home again.”

It shouldn’t be this hard to provide an affordable roof over his boy’s head.

He’s not the only one stressed about being left behind and finding it difficult to tick all the right boxes.

I’ve also heard of a solo mum of two kids who got so close to her dream of home ownership before it was suddenly snatched away. She’d saved for years and was set on buying her first home to give stability to her family but, just before Christmas, she was told she no longer fit the eligibility criteria and needed a higher income. She’s now searching for a third job.

Just before Christmas, changes to the Credit Contracts and Consumer Finance Act started to take effect. Now, people are being pinged for spending money on their cats and giving their nieces Christmas presents. Banks are running a fine-toothed comb through every transaction, so you have to choose between Netflix and getting a mortgage.

And that’s before you get to the cost of living increasing, caused by money printing and unproductive money sloshing around the economy. It’s harder to save when the weekly shop and fueling up the car gets more expensive, and rents keep going up. The inevitable mortgage rate rises loom too.

I can understand why it’s hard for anyone to trust politicians on housing when Kiwis have been let down by successive governments. Jacinda was elected to fix housing, but on her watch the average house price has risen 58 per cent, or $387,000. The gap between homeowners and non-homeowners has never been wider. This Labour Government has presided over the largest increase in inequality in New Zealand history because they are bad at policy.

First there was KiwiBuild. Then there was tilting the market towards first-home buyers by taxing their landlords more. Let’s be honest, the Nats weren’t much better.

Infrastructure, labour and materials are holding back housing supply. Enter the Labour-National joint lunacy of letting anyone build three three-storey homes up against your boundary, and Kainga Ora bidding up the price of those same resources by trying to build its own homes.

We need to restore the faith the public has lost. That starts with thinking about the solo parent desperate to find a home and what practical solutions will actually help them, rather than empty promises and campaign slogans – and we need to be responsible when things go wrong.

That’s why we need a proper inquiry into the new lending rules and why the occasional takeaway or trim latte might exclude you from the Kiwi dream of homeownership. Act MP Damien Smith has called for one in his role on the Finance and Expenditure Select Committee. It was parked by the Labour MP who chairs the committee.

The minister has handed it over to the Council of Financial Regulators, which includes the Ministry of Business, Innovation and Employment (MBIE). MBIE were the officials that advised the committee passing this law change in 2019. It should be Parliament seeking testimony from industry practitioners, rather than the officials from MBIE behind closed doors. This inquiry needs to be independent.

This law shows the problem we run into constantly with housing in New Zealand. We make everything harder than it needs to be. We start with the notion that it’s meant to difficult when it’s actually quite simple. The barrier is always bureaucracy.

Only when politicians stop making things harder and take responsibility when things go wrong will we win back the trust of parents just wanting to put a roof over their family’s head and have their slice of the Kiwi dream.

Brooke van Velden, MP, is the deputy leader of the Act Party.

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