Auckland House Prices Reach New High
Auckland House Prices Reach New
News that the average house sale price in Auckland has topped $700,000, according to Barfoot & Thompson for the month of December 2013 comes as no surprise to Affordable Auckland Leader Stephen Berry. “There has been no change to the conditions which are distorting the housing market; therefore there will be no change in how it behaves. The bubble will continue to expand until increased interest rates in a few years’ time make it pop, again.”
Berry says, “The fundamentals which are fuelling to continued increase in house prices are the same ones that that started the new bubble. Regulations instituted by Auckland Council dictating land use and limits on urban expansion are the primary reason for the housing bubble.. Basic economics has not changed since the 2013 elections. When supply is artificially restricted, demand does not reduce and price goes up.”
Lending restrictions introduced by the unelected Reserve Bank have clearly had no positive effect on house prices. “They’ve had no effect on speculator participation in the market; rather they’ve simply shut out the vulnerable first home buyer who needs to six figured deposit just to get a mortgage. If anything, the LVR restrictions have worsened the acceleration of price inflation by reducing construction of new homes; another artificial restriction on supply!”
Mr. Berry says the solutions to the housing crisis are very simple and can be found in any Year 11 Economics textbook. “Remove the limits on supply! Abolish the urban limit and let property owners decide how their property is developed, not economically illiterate politicians and bureaucrats in the town hall.”
Stephen Berry was Affordable Auckland’s candidate for Mayor in the 2013 elections, finishing in third place with 4%. He has already confirmed that he will stand again when Len Brown inevitably resigns.