[ad_1]
Concerns about runaway house prices in New Zealand are mounting, and politicians are generally weighing the blame.
Data from the Real Estate Institute released Thursday shows that the national median home price in October of $ 725,000 was 20% higher than at the same time last year.
Ten regions hit all-time highs for average prices, while Auckland’s median price grew 16.3 percent year-on-year to hit $ 1 million for the first time.
It’s a sea change from widespread predictions earlier this year of a housing price drop in the wake of Covid-19.
It has also sparked a heated discussion about what is behind the rise in prices and what needs to be done to control them.
READ MORE:
* Median house prices in Auckland surpass $ 1 million as house prices accelerate 20%
* The stimulus scheme may simply drive up house prices
* An Economy Based on Rising Home Prices: Is Property Our Path to Recovery?
Prime Minister Jacinda Ardern told the media that the government had concerns about affordability and that it needed to ensure that people were able to access the housing market.
To that end, Ardern pointed to products like the Welcome Home program, which is meant to help first-time home buyers with deposits, but said the government wanted to see what else it could do in this area.
During the election campaign, Labor pledged to continue supporting first-time home buyers through a progressive homeownership scheme.
The Labor Party has also stressed that it intends to focus on increasing the supply of affordable housing and Ardern said it was working hard to do so, but from a low base.
However, political actors of all stripes have been intervening on the issue, including both the lifting of loan-on-value restrictions by the Reserve Bank earlier this year and the Resource Management Law ( RMA) attract blame.
Supplied / Stuff
Politicians are pointing out who is to blame for rising house prices.
National housing spokesperson Nicola Willis said the sharp rise in house prices seen in the Real Estate Institute data shows how important it is for the government to proceed with RMA reform immediately.
“New Zealand is simply not building houses fast enough. An urgent reform of the RMA and our planning system is needed to unlock the housing supply.
“After three years of wasted effort and energy on the KiwiBuild failure, the Government must turn its attention to addressing the underlying planning and infrastructure challenges that have strangled New Zealand’s housing supply for too long.”
Willis said National would work constructively with the government to support a lasting reform of the RMA that could last longer than a change of government, but that what was needed now was action.
The New Zealand Initiative also singled out supply constraints, rather than demand factors such as the return of kiwis to New Zealand, as a major part of the problem.
In a research note, lead researcher David Law said that building more houses would play an important role in solving the housing crisis, which the government had promised but has so far failed to deliver.
But he said the Reserve Bank’s decision to lower OCR to its lowest level this year, coupled with a $ 100 billion quantitative easing program, was a likely cause of today’s house prices.
The Reserve Bank’s moves drew strong criticism in recent days, with both National’s shadow treasurer Andrew Bayly and ACT leader David Seymour weighing in on the issue.
According to Bayly, the policies of the Reserve Bank were becoming very contradictory.
“On the one hand, the Reserve Bank is adding fuel to the housing market fire with its accommodative monetary policy. And, on the other hand, the Reserve Bank is trying to cool the housing market by announcing that loan-to-value rates will come into effect early next year. “
The government should pose serious questions to the Reserve Bank and the consistency of its approach, he said.
