17 Apr 2015

More home buyers turn to parents for help

2:36 pm on 17 April 2015

An Auckland mortgage broker says more people are turning to their parents for handouts as house prices sky rocket.

Auckland housing. View from Mount Eden summit

Photo: RNZ / Diego Opatowski

The Reserve Bank says prices are rising by 17 percent a year and has warned the city's housing market poses a growing risk to the country's financial and economic stability.

Mortgage advisor Bruce Patten said he had never seen so many parents helping their children in his 25 years as a broker with the amounts gifted ranging from $20,000 to $200,000.

He said parents did not want their children to miss out but not everyone could help and a lot of first home buyers were being left out in the cold.

Mr Patten said the problem was only likely to get worse over the next few years.

English offers help to Australians

Meanwhile, New Zealand finance minister Bill English is offering his Australian counterparts advice on how to cope with the crisis over rapidly rising house prices.

Mr English told the Australian magazine The Business New Zealand's overpriced housing market is posing a risk to the economy but the government is doing its best to manage it.

Mr English said he can unwind the housing bubble in Auckland without doing serious damage to the economy, as long as he can speed up the supply of land for new houses.

But he also said restrictions on the number of loans equivalent to more than 80 percent of the value of a house have lost their efficacy over the past six months.

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