Guest post by Stephen Berry
A thinly-veiled call by the Reserve Bank to examine the tax status of property investors is not the solution to fixing the crisis of housing hyperinflation.
What is making housing unaffordable for increasing numbers of Aucklanders is precisely the intervention by government, councils and the Reserve Bank itself.”
Auckland Council is one of the main contributors to the unaffordability crisis affecting the property market. The refusal of the Council to abolish the Metropolitan Urban Limit – the planner-imposed ring-fence around the city—means that in a city with plentiful land there is a shortage of Auckland land for Auckland housing.
On top of this it costs, on average, $33,000 to get a consent from Auckland Council 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 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 the costs of dealing with the Council severely reduced.
Stephen Berry is the leader of Affordable Auckland, and a Candidate for Mayor of Auckland and Albany Councillor in 2016. He was third place-getter in the 2103 Auckland mayoralty election.
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