Media statement For immediate release Thursday, 1 February 2007

Land supply is important: Copeland

United Future Finance spokesperson, Gordon Copeland MP, today lamented the comments made by the Minister of Housing, Chris Carter, on Campbell Live (TV3) last night.

“It is my view that the Minister displays a lack of fundamental economic understanding when, in today’s over-hyped property market he states that 'the land issue is a red herring',” said Mr Copeland.

“In my view an adequate supply of land for new housing is fundamental if we are to see the price of housing return to a level which is affordable for most New Zealanders.

“Basic economics is very simple. When the supply for housing sections is equal to, or greater than, the demand then the price of land will moderate.

"However when the supply of land is restrained through restrictive planning so that it is way below actual demand then its price will rise and rise spectacularly. That is exactly what has happened in New Zealand.

“Land prices here are now over half the cost of new housing. In other developed countries it is just 25%.

"Over the last 5 years or so land prices have risen twice as fast as house values. Frankly it is time for the Minister of Housing and the Government to get their minds around these facts which block access to housing for thousands of New Zealand families.

“The Government gives lip service to an “ownership society” but in the real world fewer and fewer Kiwi families are able to purchase their first home.”

Mr Copeland stated that he formally raised this matter by letter to the Minister of Finance on 19 October 2006.

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