NZ Housing Affordability "In Crisis" Says Report

"New Zealand faces a housing affordability crisis," says Libertarianz Environment Deregulation Spokesman Peter Cresswell, commenting on a just-released international survey of housing affordability that finds New Zealand one of several markets facing an entirely fixable housing affordability crisis. Says the report: "It is a crisis entirely due to government land strangulation policies of the last fifteen years that have removed choice, and destroyed property rights."

Cresswell says that every New Zealander should read this report and realise that the chief mechanism of land management in NZ, the Resource Management Act, has cost them and their family dearly. "For every couple struggling to afford your first home, for every home-owner struggling to make your mortgage payments, this report demonstrates that the authoritarian restriction of land-use and the destruction of property rights brought about by the RMA is the chief cause of your distress."

The just-released 2006 report on worldwide housing affordability, co-authored by Christchurch consultant Hugh Pavletich, finds that "Housing affordability continues in crisis intensity in many markets. The most pervasive national crisis is in Australia, while the crisis is nearly as serious in Ireland, New Zealand and the UK." The major cause of housing unaffordability in these markets, says the report, is "land strangulation," and is contrasted with more affordable housing markets in some parts of North America in which land regulation is much more laissez faire.

Of the six countries and one hundred major urban property markets covered, 24 are affordable, 23 moderately unaffordable, 11 seriously unaffordable and 42 severely unaffordable.

All the major urban property markets of New Zealand are severely unaffordable, as is the major city of the Republic of Ireland, Dublin. Of the Australian urban markets, six are severely unaffordable, with two being seriously unaffordable. The United Kingdom has just one moderately unaffordable market, with the other eleven being severely unaffordable. Canada has three affordable, four moderately unaffordable, one seriously unaffordable with Vancouver being severely unaffordable. The huge and diverse United States has twenty one affordable markets, eighteen moderately unaffordable markets, eight seriously unaffordable and twenty severely unaffordable urban markets.

All the affordable markets are in North America, with three in Canada and twenty one in the United States. There are no affordable major urban property markets in the United Kingdom, Ireland, Australia and New Zealand....

The 2006 Demographia International Housing Affordability Survey illustrates how affordable most urban markets of the countries surveyed were five, ten and twenty years ago. Its findings suggest that the major cause of the loss of affordability within these markets is due to artificially strangled land supply.

"The relative unaffordability of New Zealand housing is an entirely unnecessary burden on all New Zealanders," says Cresswell, "and one that should be repaired with all possible speed. Abolition of the RMA and its replacement with common law means of property rights protection is becoming urgent," he concludes.

Linked Report: 2nd Annual Demographia International Housing Affordability Survey (2006)

ENDS

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