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Prime Minister Jacinda Ardern is speaking at her weekly post-cabinet conference.
Hours earlier, Finance Minister Grant Robertson said the government plans to clamp down on property speculators to address the housing crisis.
“There is a crisis when it comes to the housing situation right now in New Zealand,” Robertson said at a BNZ breakfast presentation in Wellington, citing housing as a focus for the 2021 budget in May.
“New Zealanders are seeing speculators and investors exclude family members from the opportunity to buy a home of their own,” he said. “We want to tip the balance more toward first-time home buyers, while also incentivizing more investment in home construction.”
After coming to power in 2017, in part on the promise of offering more affordable housing, and KiwiBuild, the government instead presided over ongoing house price inflation, supercharged by Covid-19, which saw supply plummet as people stooped and even more money. haunted even fewer houses.
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House prices have skyrocketed since the pandemic, and the national median house price rose 19 percent in December from a year earlier, defying economists’ predictions of a 5-10 drop. percent.
“We’ve seen the effects of rising property demand from speculators and investors ruin those mid-year projections that prices will fall, out of the water,” he said. “The clear intention here is to take the pressure off the housing market. Over time, what we will see is some moderation in house prices. “
Ross Giblin / Stuff
Finance Minister Grant Robertson says growing demand for properties by speculators and investors is driving prices up.
Robertson said the government would announce a continuing series of measures to address the housing crisis, starting with measures to control demand in late February.
“We all know that building more houses, particularly affordable houses, is critical,” he said. “But we can also do more to manage demand, especially from those who are speculating.”
The government has received advice from the Treasury and the Reserve Bank on measures to manage demand and discourage speculation and proposals will be submitted to Cabinet shortly, he said. The advice includes new ideas and measures that are already available in the toolkit, he said.
Plans to improve the housing supply will be announced as the 2021 Budget is finalized, he said. A “significant amount” of the additional $ 7 billion earmarked for infrastructure investment through 2033/34 would go to housing, he said. That doesn’t include transportation projects that are funded separately.
Robertson did not provide further details on the plans, but said it was time for “bold action.”
“The market has moved quickly and rapidly in a way that is not sustainable,” he said. “We have some tough decisions to face and we will.”
Monique Ford / Stuff
Housing will be a clear focus for the 2021 budget in May.
The economy has recovered faster than expected from the end of last year. A report last week showed that the unemployment rate unexpectedly fell to 4.9 percent in the December quarter from 5.3 percent in the September quarter, as a booming construction sector offset the weakness. in areas such as tourism that have been affected by the closure of the border.
“Our economy has recovered much better than expected and we are in a strong position to handle what lies ahead,” said Robertson.
Updated projections from the Treasury show that net debt would stand at 36.5 percent of GDP in 2034/35, $ 60 billion less than previously forecast in September last year, he said.
Robertson said he would focus on directing spending to the areas and people that need it most, balancing investment in public service with controlling debt.
“As the economy has recovered stronger than expected, we are taking the opportunity to assess whether the money can be better targeted or reprioritized where it has not been used yet,” he said.
Audio provided by RNZ.
