13 Nov 2014

First home buyers not shut out - Key

8:55 am on 13 November 2014

Prime Minister John Key insists first-home buyers will not be shut out of the market as the Reserve Bank keeps its restrictions on low-deposit home lending.

John Key

John Key Photo: RNZ / Diego Opatowski

The bank's governor yesterday declined to ease the restraints, saying house-price inflation may yet resurge, especially considering the strong immigration flows.

Mr Key said the restraints did not necessarily stop first home buyers getting a loan in excess of 80 percent of a property's value.

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"And of course if they go through their KiwiSaver HomeStart programme they're exempt from that as long as they have a 10 percent deposit."

However, the Green Party said the Government's inadequate housing policy was to blame for the Reserve Bank having to maintain the restrictions.

Greens co-leader Russel Norman said the restrictions on low-deposit lending would continue to hurt first-home buyers.

He said the Government needed to quell the strong demand from foreign buyers and speculators, and increase the amount of medium-density housing available to bring house prices down.

Mr Norman said the Government should also introduce a capital gains tax.

Russel Norman

Russel Norman Photo: RNZ / Diego Opatowski

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