House price rises kept down — P.M.

Press, 26 May 1977, Page 5

House price rises kept down — P.M.

PA Wellington. Last year the average price of a house rose between 6 and 7 per cent — much less than the overall rate of inflation, the Prime Minister (Mr Muldoon) claimed. Opening the annual conference of the New Zealand insurance Institute, Mr Muldoon said that several years of this kind of stability would be needed to off-set the virtual doubling of house prices during the three-year term of the Labour Government. The massive cut-back on net migration into New Zealand would help achieve this goal, he said. Mr Muldoon assured the delegates that the Government intended to keep the building industry going at a normal rate, but beyond that, by limiting inward migration, the Government intended to keep the pressure off housing and thus stabilise house prices until a normal income bore a similar relationship to the price of a house, the amount of a deposit, the mortgage repayments as it did at the time of the change of government in 1972. There had been a reduction in the rate of inflation in each quarter since the second quarter of 1976 — something that did not happen during the whole three years of the Labour Government. He said that he would have predicted that by

June, 1977, the Government’s popularity would have slumped considerably and the polls would have been running strongly against the Government. “It was very obvious to me that we had to take steps to correct economic imbalances which could never be popular vith the public," he added. “That this move in public opinion had not appeared is a very considerable compliment to the commonsense of the ordinary New Zealanders,” said the Prime Minister. "I have never doubted that at the end of our first three-year term I would be able to convince the country that in three years we had moved toward the restoration of economic stability and that my National Government was worthy of a second term in office,” said Mr Muldoon. He did not expect the terms of trade to recover by the end of next year which meant that at the next election New Zealand would still be battling against adverse economic forces. “The people of this country are not fools and they are not quitters. They can face up to a challenge and they can face up to adversity. “So long as my colleagues and I present them with the facts. Even if those facts are unpalatable, I believe that they will respond,” said Mr Muldoon.