Closer Look Needed On Housing Affordability Solutions

MEDIA RELEASE

19.11.2012

Closer Look Needed On Housing Affordability Solutions

The Labour Party's focus on housing unaffordability is a welcome move at a time of crisis, although root causes of the issue still need to be addressed in greater detail if the crisis is to be resolved, says Property Council New Zealand.

With the spotlight now firmly on how to make houses affordable for first home buyers, the Government and opposition need to look closely at the whole spectrum of issues and consider what can be done to address all the factors which push up the price of a new home, said Property Council’s chief executive, Connal Townsend. “This issue is not going to go away until it is adequately addressed from all sides of the unaffordability equation.

“Housing unaffordability is caused by a range of issues, especially the supply of land. There are questions to be answered on where and how greenfield and brownfield land is to be acquired, particularly in Auckland. Consenting fees, development contributions and other levies are also core contributors to the rising price of new houses, with costs often passed to the purchaser – effectively a first home buyer’s tax.

“Another issue is the ability to source finance for new developments, which has been particularly tight in recent years. Labour’s policy seeks to tackle this issue by proposing government-issued Home Ownership Bonds. However, we would expect property development companies to be involved in the construction process, as a balance is always needed between public and private development.

Property Council has long believed the built environment should be given greater recognition in the Resource Management Act. “Labour’s intention to introduce a National Policy Statement under the RMA to ensure planning rules and consenting decisions support affordable housing is a laudable move,” he said.

“With a policy such as this, it is important to consider all the costs. We note that Labour has given particular attention to the construction of apartment buildings. This type of property development typically costs $6,000 to $6,500 a square metre for a low to medium rise apartment. We would need to see greater detail on how Labour will achieve a maximum price of $300,000 for a new built home.

“Property Council looks forward to seeing Labour’s policy when it has been worked through in more detail when it considers levies, charges and red tape that contribute to the cost of building and buying a home.”

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