19 May 2015

Housing initiative not result of polling - PM

5:38 am on 19 May 2015

The Prime Minister has rejected suggestions the Government is clamping down further on property investors because polling tells it people are worried about the Auckland housing market.

John Key during caucas run 5/5/15

Prime Minister John Key. Photo: RNZ / Alexander Robertson

John Key said the decision to tax capital gains on residential properties sold within two years of purchase had nothing to do with the National Party's polling.

"We don't do that. We haven't done any polling on housing, zero. I can't think of - we have our standard questions that we ask every single week, and we have for years, about economic development.

"But we didn't go out specifically and poll on this, or what would happen if we had a bright line test, or what would have happened if we did. We just don't do that. It's not generally the way we operate."

But Mr Key said National's polling had revealed housing had become a "more elevated", although not the most important, issue on people's minds.

He also conceded the Government had become more worried about rising house prices in Auckland, and had been discussing it with the Reserve Bank.

But he said last month's speech by the bank's deputy governor Grant Spencer raising concerns about the matter did not prompt the Government to act.

"There's been a lot of discussion about housing for quite a long period of time and there's been quite a lot of informal thinking about the tax settings that we have. This is sort of - it's an ongoing thing.

"I think it's all part of - they dovetail in together. But the fact he gave the speech didn't make us go and do these things. I don't think that's the right order but it's fair to say we've been having discussions with them and thinking about these things," Mr Key said.

He said the initiative he announced on Sunday would not in itself stop Auckland house prices rising rapidly.

"I don't think what we announced ... is going to be the single silver bullet that will do something. I think by far the best solution is increasing supply, but it doesn't mean that there aren't a range of different things you can't do.

"We took the duties off imported products. We've been releasing our own series of land where we can. We've got special housing areas. There's a bunch of things we've been doing. This is just one initiative."

Get the new RNZ app

for ad-free news and current affairs