Good luck with that Winston

I think Winston Peters needs a call from Darryl Kerrigan: Quote:

Acting Prime Minister Winston Peters says houses should be affordable even to those on a living wage.

Peters said on Tuesday that “a long-term target” of getting median house prices to drop to five times the annual living wage was desirable and “should be achievable before too long”.

“That’s what our aspiration is, to have a first house buying regime, where young families with not great deal of discretionary money, nevertheless can buy their first home.”

“If you’re a single person it should be five times and if you’re a couple buying a house it should not be ten times,” he said.

This would take either extraordinary wage growth or a massive drop in house prices.

Currently Living Wage Aotearoa puts the living wage at $20.55 an hour – or $42,744 a year while working a 40-hour week.

A house at five times that annual income would be $213,720. New Zealand’s current median house price is $562,000 nationally, or 13 times the living wage annual income. End quote.

That won’t be a vote winner for Winston, he’s basically saying that he wants to collapse house prices. That means that homeowners would get a massive haircut. The economy would collapse and the banks would go broke. Having night after night of crying homeowners in mortgagee sales is the death of any politician who causes that.

Having massive wage increases might achieve that too, but the inflationary pressures of that would also ripple the economy. Quote:

Housing Minister Phil Twyford said getting house prices and wages back into sync was a long-term goal, but acknowledged it would take a very long time to get someone on the living wage into affordable homes.

“Our idea of success is for house prices to be stable while incomes grow,” Twyford said.

He noted that two or three generations ago “a single income household on an unskilled wage” could purchase property without too much trouble but things had become significantly worse since then.

Twyford said his KiwiBuild policy aimed to dramatically increase the amount of modestly priced homes being built while not actively bringing house prices down.

However even the cheapest of KiwiBuild homes in Auckland will cost $500,000 – over ten times the annual living wage, but around five times the median household income.

Twyford said Peters was talking about making housing roughly “twice as affordable” in Auckland.

“I think [Peters] is well within the range of what we we are trying to do as a Government. We are trying to make housing more affordable.” End quote.

Twyford is dreamin’ too.