Housing New Zealand tenant Jenna McFadyen (28) outside her
Concord home which was being insulated yesterday. Photo by
Equity in Dunedin homes will be the ''collateral damage''
of the Government's mismanagement of the Auckland housing
crisis, Labour Housing spokesperson Phil Twyford says.
But Housing Minister Dr Nick Smith, who was visiting Housing
New Zealand (HNZ) FirstHome houses in Dunedin yesterday, said
Labour had overlooked that New Zealand operates financially
as one nation.
Mr Twyford said the Reserve Bank's loan-to-value ratio (LVR)
restrictions was a ''one size fits all'' policy and the
equity in Dunedin homes could ''take a hit'' because of the
Government's mismanagement of the Auckland housing crisis.
''Homeowners in Dunedin risk ending up as the collateral
damage of a policy designed to dampen demand in the Auckland
The LVR policy resulted in a 20% deposit being required for
new residential mortgage lending.
Dr Smith said when Labour was in Government, house prices
doubled and the Reserve Bank had to put interest rates up.
The high interest rates resulted in Dunedin residents with
mortgages paying more.
''People in Dunedin were hit hard.''
But a Government could not raise interest rates in Auckland
and not Dunedin, he said.
The Reserve Bank introduced the LVR to curb a rise in
interest rates and keep New Zealand ahead in the global
If the Reserve Bank raised interest rates faster than other
countries then New Zealand would become ''a magnet for
capital'' and the New Zealand dollar would strengthen.
''That would be hugely damaging for provincial export
industries, and Otago and Southland are very dependent on
"If the Reserve Bank does not use the LVR tool and uses the
traditional tool of interest rates, it is the provinces and
the exporting regions that would pay the highest price.''
Dr Smith visited two Housing New Zealand FirstHome houses
with $160,000 and $185,000 market values in Wakari yesterday
FirstHome is designed to help low income earners buy a former
state house at market value by offering a 10% grant for the
Dr Smith said the two houses were in ''good nick'' and
similar houses in Auckland would be treble the price, he
Aucklanders were unaware how much cheaper living expenses
were in Dunedin and unemployment rates were similar in both
He would rather live in Dunedin than pay treble for the same
property in Auckland.
HNZ tenancy services regional manager Symon Leggett said if a
buyer was eligible and was happy with the price of a
FirstHome house, then it was first in, first served.
There was a surplus of Housing New Zealand houses in Dunedin,
with 28 properties available and 18 people on the waiting
Mr Leggett was in Concord yesterday afternoon to see one of
the last HNZ houses in Dunedin be insulated under the Energy
Efficiency Retrofit Programme.
More than 46,000 state rentals, including 359 in Dunedin, had
been insulated under the programme since 2001, he said.
''We've invested $76 million to make our homes drier and
Tenant Jenna McFadyen said she had lived in an uninsulated
HNZ home and her children Rion (7) and Reco (2) had
tonsillitis, ear infections and asthma.
In the insulated house, her children were much healthier,
Miss McFadyen said.