PoliticsJuly 12, 2016

An inspiring cross-party address on the housing crisis, by John Key and Andrew Little

Guest writer

We edited John Key and Andrew Little’s words together into a surprisingly unified speech on the housing crisis.

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While I was putting together this impossible quiz, I noticed something surprising: John Key and Andrew Little were starting to make sense. Reading quotes by the pair on the housing crisis – Key’s from a speech in 2007, Little’s from interviews and press releases in 2016 – it was obvious their words were developing a kind of synergy. They flowed off the page, sounding forth with a unity of purpose not often seen by opposing political leaders. Stripped of their usual internecine squabbling, our politicians were even kind of inspiring. More than that, they put forward a real vision for how to solve the housing crisis.

So in the interests of fixing New Zealand’s worst ongoing catastrophe and painting our major party leaders in a different light, I’ve edited their words into a single speech. Key’s words are in blue, while Little’s are in red. Ours are in black. Now without further ado, The Spinoff is proud to host the first major cross-party address on the housing crisis, by Andrew Little and John Key. – Hayden Donnell

Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse. This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities.

Three quarters of New Zealanders under 40 now don’t own a home, many of whom have given up on ever buying a house. Too many Kiwi families can’t see a way to get themselves onto the first rung of the property ladder. They don’t even aspire to owning their own home anymore. We have to turn that around.

The housing crisis is about all of us. It affects young people getting up to their eyeballs in debt for a basic starter home, renting families who can’t save enough even for a deposit, older Kiwis watching their children struggle to get a place of their own, and kids who are bounced from school to school as their parents have to change rentals.

On current trends, the crisis will only deepen. Home ownership rates are predicted to plummet within the next decade. And one of the biggest factors influencing homeownership rates over the next 10 years will be the difficulty young buyers will have getting into their first home.

It’s not just the homeless and people crammed into homes – it’s actually people who are just doing their best to save for a deposit, can’t save, can’t keep up with house price inflation, can’t get their first home. We’ve got to help them out.

Quite simply, not enough new houses are being built in New Zealand. In many parts of the country, increases in demand for housing are now outstripping supply. Economics 101 would tell you that if the demand for housing outstrips supply, then the only way for house prices to go is up, up, up.

You need only look at what that means for a first-home buyer on the average wage buying a median-priced house. In 1999 it took just 42% of their average take-home pay to service their mortgage. It now takes around 81%. That’s after they’ve somehow managed to save up a 20% deposit in the first place. That is a crippling increase.

We can’t keep going like this. If we do, we’re going to be left with a country where home ownership becomes the privilege of just a very lucky few rather than a birthright for most Kiwis.

This problem won’t be solved by knee-jerk, quick-fix plans. And it won’t be curbed with one or two government-sponsored building developments. What this Government must do is come up with a comprehensive housing policy that tackles the crisis across the board. Instead of half-measures and piecemeal policies the priority should be to build affordable houses for people to live in.

We need Government leadership that is prepared to focus on the fundamental issues driving the crisis. It’s well past time for a change. We owe it to the young couples worried they’ll never be able to buy a home, because our housing market is out of control.

We want to ensure that every young New Zealander who works hard and is disciplined about saving can expect to own their own home and thereby have a real stake in the economic future of this country.

New Zealand can be a country that restores the Kiwi dream of homeownership. We can be a country that gives young families a real chance at buying a home.

Thank you.

Keep going!

PoliticsJuly 11, 2016

Who said it? John Key in 2007 or Andrew Little in 2016

Hayden Donnell

Contributing writer

We designed a quiz to test whether you can tell the difference between the Prime Minister of nine years ago and the Labour leader of today. It’s improbably difficult.

It’s the End Times in the Auckland housing market. An average house is worth 10 times the average household income. Only four percent of sales are “affordable”. A small accumulation of empty smoothie cups in the Herne Bay dirt would have a higher net worth than most young people.

A lot of politicians don’t care. They murmur placating words and occasionally throw money in the general direction of the problem. But when someone suggests an actual solution, like trying to drop house prices from catastrophic to merely eye-watering levels, they rend their robes in horror.

Luckily one National Party politician is willing to confront this issue head-on. While his leader stubbornly continues to refer to Auckland’s housing market as a “challenge”, this MP refuses to understate the problem: “We are facing a severe home affordability and ownership crisis,” he says. “The crisis has reached dangerous levels in recent years and looks set to get worse.”

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And while the Prime Minister advises aspiring homeowners to try searching TradeMe for houseboats, this man refuses to mince words. “This is an issue that should concern all New Zealanders,” he says. “It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.”

This brave politician is John Key. In 2007.

Bernard Hickey recently dug out a speech Key delivered to the New Zealand Contractors Federation on August 21, 2007. The future Prime Minister scarcely resembles the man who recently said young people are deciding not to get houses early because they’re delaying childbirth and marriage. He is bullish on the scale of the problem, and the need to provide big, bold fixes.

The main difference between 2007 and now, is that the average house in Auckland has gone from “very unaffordable” to “literally sell a kidney if you want a deposit”. But in his speech, Key tears into the Government for allowing house prices to spiral out of control. He is angry and hectoring. These days Key hates the words “housing crisis”. But the Circa 2007 version of the Prime Minister bandies them about more than “at the end of the day“.

He sounds almost exactly like Andrew Little does now.

Did the perma-frown-wearing Labour leader snatch the Prime Minister’s body for a brief period nine years ago? Or has Key, when faced with an markedly worse set of circumstances, cynically reformed his language to downplay the slowly spooling and spreading crisis that’s developed on his watch?

One thing is for certain – there’s barely a difference between the two men, nine years apart. To prove it, we put together this quiz. Take it, but know that – just like a first-home buyer – you are doomed before you begin.