Monday, 20 January 2020

Housing crisis spreads to provinces, middle-class under threat

“The annual Demographia International Housing Affordability Survey shows the housing crisis has spread to provincial New Zealand and Labour’s policies have failed to improve affordability”, ACT Leader David Seymour says.

“Every housing market in the country now rated ‘severely unaffordable’ meaning that the median house price is at least five times the median household income.

“The median house price is now 7.4 times the median income in Napier-Hastings, indicating that the housing crisis has now spread to the provinces.

“The effect of this is that even well-paid, professional Kiwis are unable to buy homes in the cities where they work. This is a serious threat to productivity, the main driver of our living standards.

“If we want to provide opportunity to the next generation of New Zealanders, we must build enough houses that are connected to education and jobs. On this measure, we are failing miserably.

“Housing affordability is now a serious threat to the middle-class in New Zealand.

“It is positive that dwelling consents are increasing, but the fact we have only just reached 1974 levels shows we still haven’t been able to scale up and build enough housing.

“Housing affordability is driven by governments placing restrictions on the supply of land. Land has been made scarce by regulation that locks up land for development, making supply unresponsive to demand.

“It costs too much and takes too long to build a house. New Zealand is one of the least densely populated countries in the world, but government has driven land prices up, with the result that in that housing has become severely unaffordable.

“ACT would remove large cities from the Resource Management Act, and create separate urban development legislation, prioritising land supply and reducing red tape on developers.

“We would incentivise councils to consent more land for development and build more infrastructure, by sharing a portion of GST levied on construction.

“Finally, we would get councils out of the building standards process, by replacing council building inspections and compliance with a mandatory private insurance regime for buildings.”