Media release: Nat’s housing policy will drive prices sky high: NZ Initiative
Wellington (25 August 2014): National’s Homestart policy will fuel higher house prices and make it harder for Kiwis to enter the housing market, according to economic think-tank The New Zealand Initiative.
Executive Director Dr Oliver Hartwich says any housing policy aimed at making housing more affordable must start by increasing supply.
“National’s announcement does nothing to remove the constraints and roadblocks to building more houses, such as tight land supply and limited infrastructure. All it will do is subsidise demand, which is likely to push prices even higher.
“It may well be a vote catcher but it in the long term the policy will exacerbate New Zealand’s housing affordability crisis rather than solving it,” Dr Hartwich says.
A new report from The New Zealand Initiative shows the country will be short more than 113,000 homes unless construction increases from current levels.
“Construction has fallen to just over 15,000 new dwellings per annum. Supply is at its lowest level since the mid 1930’s.
“Instead of turning the tide on the greatest crisis facing the New Zealand economy, the government seems to have chosen good politics over good policy,” Dr Hartwich says.
Dr Hartwich says best solution to affordability is to remove the roadblocks to development, starting with reform of the RMA and boosting infrastructure finance for councils.
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