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On house prices and anti-foreigner sentiment

On house prices and anti-foreigner sentiment
ACT Leader Jamie Whyte

The prices of residential homes are high because land use restrictions, of the kind supported by the Greens, create an artificial scarcity. But the Greens don’t see it that way. They think the problem is not insufficient supply but excessive demand. So Russell Norman today announced a plan to get land prices down by stopping New Zealanders from selling their land to foreigners.

According to Russell Norman, “if you took 10% out of the demand side, you would go a long way to stabilising prices”.

Perhaps you would. But there are many alternative ways of doing this. Mr Norman might have suggested a ban on selling your home to a woman in her 30s. Or he could seek a ban on selling your home to anyone over 180cm in height or to natural blonds.

Of course, such prohibitions would be morally outrageous. And Mr Norman would never suggest them. But what makes a ban on selling your property to foreigners any less outrageous?

This combination of state-directed capitalism and anti-foreigner sentiment has a very ugly history. I am amazed that the Greens, who I had always taken to be misguided but decent people, should wish to tread that path.

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