- Mark Gosche highlights the drastic rise in house prices from $35,000 in the 1980s to around $800,000 today.
- Gosche criticises the rollback of state housing initiatives, warning of a return to overcrowding and poor conditions.
- He emphasises the importance of public housing, citing historical benefits and the risks of neglecting past lessons.
When Mark Gosche bought his first house in the early 1980s the interest rates were huge – up around 18% – but the house only cost $35,000.
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The former South Auckland MP for Labour thinks the same house would cost around $800,000 or $900,000 in today’s market.
At the time, Gosche was a union organiser and said he wasn’t paid much but even with the high interest rates the mortgage was manageable given the much lower entry point into the market.
Fast forward to the Year 2000 and Gosche, now in his late 60s, is the newly-appointed Housing Minister in Helen Clark’s Labour Government.
Much had changed by then with advantages seen by previous generations stripped away, and under the previous National Government income-related rents (where state house tenants paid no more than 25% of their income on rent) had been replaced by market rents.
An accommodation supplement was introduced but Labour said the system did not offset the rent hikes for those most in need and led to overcrowding and disease.
Gosche told OneRoof: “By the time I became minister in 2000, the housing market was an utter mess for low-income people and for people wanting to get into home-ownership.”
He pointed to his parents’ generation as being the real “lucky ones”.
They had access to long-term cheap loans through the defunct Government-owned State Advances Corporation, which operated from the 1930s to the 1970s.
People could access mortgages at rates of 3% for 30 years, for example, enabling lower-income people to become homeowners, and statistically, the children of homeowners are more likely to also own homes.
Gosche said former National Prime Minister Robert Muldoon (1975-1984) did away with the cheap loans, and he said another contributor to the current state of housing unaffordability was the deregulation of the labour market in 1990 (by the National Government under Jim Bolger), which led to a “whole bunch of people on very, very low incomes”.
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State houses were also sold off in the 1990s and Gosche said as Housing Minister he brought back income-related rents, stopped the sale of state houses and began to build more.
He is disappointed the current Coalition Government is stepping back again from state housing, saying the provision of housing by the state is a necessary part of New Zealand’s social structure.
“It does astound me that learning from history is something that governments are unable to do and we’re going through this cycle of saying it’s bad to have public housing,” he said.
National Prime Minister Robert Muldoon. Gosche says the long-term leader did away with cheap housing loans. Photo / Getty Images
Gosche was a minister in Helen Clark’s Labour Cabinet in the 2000s. Photo / Martin Sykes
“Well, we’ve had public housing for a very long time in New Zealand because the alternative was bloody awful.”
In the 1930s and 40s, for example, the wealthy suburbs of Herne Bay, Ponsonby and Freemans Bay, were slums, Gosche said.
“It all changed and gentrified and everybody got shoved out to South Auckland, but the beginnings of state housing were to overcome what were dreadful, unhealthy slums that poor people had to live in.”
As the former residents of those suburbs moved on, however, they were able to get State Advances loans and buy houses because the Government enabled that.
Gosche recently resigned from chairing Kāinga Ora (formerly Housing New Zealand) following a negative review of the organisation by the Coalition but said the balance sheet had doubled from $20 billion to $40bn and the debt against that was for building houses that were owned by the Government and people of New Zealand.
He feared a return to the overcrowding of the 1990s when people from multiple households lived together, saying that was already been seen, as was demonstrated during Covid when essential workers were found living in households of 15 to 20 people.
Not learning from the past was a false economy, he said. When people have decent housing they get healthcare earlier, their children are more likely to be in education, and they are less likely to interact with the justice system.
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