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Property Institute says Budget ‘misses opportunities’

Thursday, 26 May 2016

Property Institute says Budget ‘misses opportunities’

Property Institute of New Zealand Chief Executive, Ashley Church, has given today’s budget a qualified pass mark describing it as ‘a largely responsible mixture of worthy initiatives and missed opportunities’.

The key housing initiatives contained in the Budget are $258 million to provide at least 750 more social housing places in Auckland and $100 million to free up more Crown land in Auckland for housing.

Mr Church says that this level of spending is in line with what he would have expected the Government to have done given its other priorities around Health, Welfare, Education and the repayment of debt.

“Any Government which touted itself as being able to solve the Auckland housing crisis on its own would need to embark upon a massive State funded home building program – and that simply isn’t going to happen while Bill English holds the purse string”.

However, Mr Church says that the Government has missed an opportunity to influence the housing market in other ways.

“While it’s good to see that there has been no repeat of last years ill-considered attempts to artificially slow the housing market, and no mention of knee-jerk responses such as land taxes – it’s disappointing that there are no positive initiatives to further encourage the private construction of new homes”.

Mr Church says that he would have expected further adjustments around the KiwiSaver Home Start grant and some clever uses of taxation such as the reinstatement of depreciation incentives for Property Investors who build new dwellings.

“Sadly, there doesn’t appear to be much imagination in the measures announced”.

Mr Church has applauded the proposed National Policy Statement on Urban development – which directs Councils to allow more housing development where necessary – but he says it won’t achieve what the Government is claiming for it.

“Opening up more land is a good thing – but any belief that doing so will reduce house prices is naïve. We need tens of thousands of new homes in Auckland – so the best that can be hoped for is to reduce that backlog as quickly as possible so as to slow house price inflation down from its current dizzying heights. But house prices aren’t going to drop anytime soon”.

ENDS

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