July 2016

Loan to Income Restrictions Make No Sense

Auckland Mayoral candidate John Palino says an investigation by the Reserve Bank into the merits of imposing loan to income restrictions on home buyers makes no sense. “It would be completely ineffective and only impact those already worst affected by inflated house prices; young families and the poor.”

Mr. Palino says, “The behavior of wealthy investors would be unchanged by new restrictions because they have sufficient income streams to continue borrowing. The only difference would be fewer new homebuyers bidding at auctions!

“It is widely recognised that the issues currently being faced in the Auckland housing market are those of supply. House price inflation being fed by speculatory behavior is a symptom of an underlying problem, not the cause. That problem is the artificial shortage of land resulting from the Metropolitan Urban Limit..

“For years politicians and bureaucrats alike have sought to pass regulations to fix house price inflation while failing to understand that regulations preventing development of outer Auckland are its source. If I am elected Mayor I will work with Council to abolish the Metropolitan Urban Limit, streamline consenting requirements and allow greater intensification along major transport routes outside of the city.”

“Such a move would enable the market to begin meeting the growing demand for housing and stabilise prices. Until we fix the artificial land shortage caused by council planning, Auckland house prices will only go up.”

John Palino released his book ‘A Vision for Auckland’.

You can download your own copy at palinoformayor.co.nz" said Palino.

www.palinoformayor.co.nz

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