Home-owners financing overseas profiteers?

Press, 24 July 1987, Page 3

Home-owners financing overseas profiteers?

By

OLIVER RIDDELL

in Wellington New Zealand homeowners are financing overseas profiteers, according to the Leader of the Opposition, Mr Bolger, in launching the National Party’s housing policy yesterday. In New Zealand today a house was paid for in interest four times in 20 years, and even after that the home owner had not paid off the principal mortgage. Indirectly, the repayments went to the overseas financier who was investing in New Zealand to profit from the Labour Government’s high interest rate policy, Mr Bolger said.

National’s commitment was to introduce realistic reforms to ensure that New Zealand families were housed adequately. At present, the Housing Corporation borrowed money at market rates

and, with excnange risks, to lend to those qualifying for home loans at low interest rates, Mr Bolger said.

The interest differential between the cost of the loan and the charge to the client was a direct State subsidy.

There was no valid reason why the State through the Housing Corporation should dominate lending to medium-in-come and low-income homes, he said. National believed that the borrowing and lending should be the responsibility of the private lending institutions.

The role of the Housing Corporation would be to provide assistance by way of an interest rate subsidy, and/or a Housing Corporation mortgage guarantee of up to 90 per cent of the purchase price of either new or existing policies, Mr Bolger said. The eligibility for this

assistance would be based on need. The present criteria of income and asset levels and the number of depen-

dants would continue to apply, but the interest rate subsidy would be reviewed every three years. National would break

the inflationary and high interest rate cycles which were making it so difficult to save for a deposit, and then meet the regular payments on the family home. National would encourage home ownership as a means of providing personal security, Mr Bolger said. It would

therefore encourage the sale of State houses to their tenants. The Minister of Housing, Mr Goff, said that the most significant promise National was making was to all but close down rental and mortgage lending assistance through the Housing Corporation.