Blundering On
Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
21 JULY 2016
BLUNDERING ON
Anyone who has not been in outer space over recent months has seen momentous and unpredictable events unfolding. Brexit and multiple uncertainties and risks in the global economy have created a sombre outlook. Globally, economic growth is faltering.
“The economic update released by the Reserve Bank today – in effect a health warning on the outlook – is yet another stark warning that risks are proliferating,” says New Zealand First Leader and Northland MP Rt Hon Winston Peters.
“The possibility of an event that could trigger a serious correction in global property markets is real. In that event it is unlikely the New Zealand housing market would be immune.
“The Reserve Bank’s recently announced intended intervention in the housing market is a damning condemnation of the utter mess the Key government has made of housing.
“Further tightening of the deposit requirements for property investors is wholly inadequate given the scale of the housing crisis and the risks it poses for the New Zealand economy as a whole.
“In the event of a correction the characteristics of the property market will come into play.
“The Government and the Reserve Bank should be informing the public of the realities of the property market.
“First, that property bubbles like the Auckland housing market are highly vulnerable to a shock. Housing stress can kick in very suddenly.
“Second, property is not a liquid asset. If things go wrong it can be difficult to exit the market in a hurry. This is not such a problem if it’s the long term family home but for others it can be a calamity.
“Third, one of the characteristics of property cycles is that they tend to be long lived. When a downturn happens it can be prolonged.
“No one can predict the future but a responsible government would be concerned to alert the public given the extreme prices for New Zealand property, particularly in Auckland.
“As New Zealand First has repeatedly pointed out the real answers to the housing crisis are staring the government in the face – cut immigration to a sensible level and cut out foreign buyers.
“Even the head of the ANZ New Zealand David Hisco has now joined the chorus of business people calling for drastic action.
“The government’s refusal to address the fundamental issues behind the housing crisis shows that its words are hollow – it is not actually interested in solutions.
“Why have we got a government that is refusing to govern on behalf of NZ citizens?” says Mr Peters.
ENDS