Debt-to-income limits won’t build one new house

Introducing debt-to-income limits won’t do anything to address the supply problem that is fuelling the country’s housing shortage, National’s Shadow Treasurer Andrew Bayly says.

“This is more tinkering around the edges from Labour, which should be prioritising initiatives that will actually get more houses built.

“National has, for months, been calling for emergency housing powers to be introduced similar to those used after the Canterbury earthquakes.

“We have draft legislation ready to go that would short-circuit the RMA and incentivise councils to build supporting infrastructure by offering $50,000 for every extra dwelling they consent above their historical average.

“Labour could pick up this legislation today and the get the ball rolling on meaningful help for first-home buyers, but it appears more interested in waging war with investors.

“Trying to kill off demand with blunt tools like DTI limits, without addressing the housing supply problem, will simply lock thousands of Kiwis out of the market unnecessarily.

“While the concept of a debt serviceability restrictions may have a place if excessive risk-taking by banks was posing a threat to financial stability, but it’s unclear that is the case. In fact, retail banks are already conservative in their lending practices.

“National is very concerned that first-home buyers will still be disadvantaged. The Government needs to provide more detail about what these restrictions will look like.

“It looks like an admission of failure after his plan to dress up a capital gains tax as a bright-line test extension and remove interest deductibility did little to cool the housing market.”