Intervention Not the Solution to Housing Crisis

“A thinly-veiled call by the Reserve Bank to examine the tax status of property investors is not the solution to fixing the housing hyperinflation crisis,” says Affordable Auckland Mayoral candidate Stephen Berry. “It is precisely intervention by government, councils and the Reserve Bank itself which is making housing unaffordable for increasing numbers of Aucklanders.”

“Auckland Council is one of the main contributors to the unaffordability crisis affecting the property market,” Mr. Berry says. “The refusal of the Council to abolish the Metropolitan Urban Limit means in a country with plentiful land, there is a shortage available for Aucklanders. On top of this it costs, on average, $33,000 to get consent to build each home..”

Central Government is also making the crisis worse with its efforts to help people into the market. “Giving larger grants to first home buyers just makes the problem worse. This just adds petrol to the fire by increasing the number of participants in the market without increasing supply.

“Let’s also not forget what happened last time the Reserve Bank dabbled in the housing market. Implementing Loan to Value Ratios made absolutely zero impact on house prices but shut out young families and those on low incomes.”

Affordable Auckland’s solution to the housing crisis is to deregulate the market and remove the regulatory distortions causing inflation. The party says the Metropolitan Urban Limit needs to be abolished; the consents process streamlined, increased density permitted where appropriate and costs of dealing with the Council reduced.

ENDS

© Scoop Media