Property Institute welcomes Labour Housing policy

Property Institute of New Zealand Chief Executive, Ashley Church, has welcomed many of the housing initiatives proposed, today, by the Labour Party and says that their focus on the need to collaborate with the private sector is a particularly positive feature of the policy.

"Labour appear to have recognised that the most effective way to deal with the housing crisis is to work cooperatively with private developers and Mums and Dads to build as many homes as quickly as possible. That's not just a good idea - it's also the only practical way to start turning the tide on runaway house price inflation".

Mr Church says that the policy is also notable for the near absence of measures designed to punish homeowners and property investors.

"The focus on positive initiatives to grow the housing stock - rather than pointless nanny-state measures which punish success - is probably one of the most unexpected and constructive features of this policy. Capital Gains Taxes and moves to stack the tax regime against property investors might have played well to a section of the electorate - but they play to envy rather than solving any of the problems facing the housing market. The fact that they don't feature in this policy announcement bodes well for a responsible and effective Government when Labour eventually regain the Treasury benches".

"On balance - this suite of proposals constitutes a very worthwhile contribution to the current housing debate".

On the proposal to establish an 'Affordable Housing Authority' to partner with the private sector to fast-track development:

"While we support the Urban Authority concept - we favour several, competing, Crown or Council owned companies rather than one Big Brother bureaucracy. However, given that we had already flagged the idea that one of these companies should be tasked with focusing on affordable housing - we broadly support the proposal as outlined by Labour".

On the proposal to build 100,000 affordable homes across the country:

"The aspiration to build 100,000 new homes over 10 years is laudable - but we don't believe that the proposed price points are achievable, particularly in Auckland. Land costs, in most parts of the city, are already approaching or exceeding $500k to $600k per section in July 2016 - so unless there is an (as yet unannounced) additional proposal to heavily subsidise these homes there is simply no way to achieve, and sustain, house prices at that level".

On the proposal to remove barriers that are stopping Auckland growing up and out:

"We absolutely support Labours proposal to remove urban growth boundaries and free up density controls - but with a couple of caveats. An open-slather, unplanned, approach to green fields development would place an unreasonable and unaffordable strain on infrastructure providers - so we believe that new developments should generally be contiguous to existing boundaries on the fringes of cities. Likewise, many of the objections to increased housing density would be overcome if people had confidence that these developments were being constructed to a quality finish and to a high standard of urban design. That would mean no more soulless boxes and ready-made ghettos".

On the proposal to stop foreign speculators from buying existing New Zealand homes:

"We support putting a ban on the ability of foreigners to buy existing New Zealand homes - but allowing them to buy newly constructed homes, so that their capital is put to a positive and constructive use which helps to increase the housing supply".

On extending the 'Bright Line' test from 2 to 5 years:

"The recent decision to cut the tax liability test from 10 to 2 years was to ensure that speculators were paying their share of tax while not penalising property investors who were adding to the overall stock of rental accommodation. The proposal to increase the Bright Line test to 5 years' risks blurring that distinction. Since it is unlikely that a speculator would hold a property for 5 years before selling - the main effect would probably be to punish Landlords selling for legitimate reasons".

On turning Housing New Zealand back into a ministry:

"Housing New Zealand operated as a Government Department for most of its history - and while it was effective during the years when we were developing our infrastructure - that model clearly stopped working in the last couple of decades of the 20th century. We don't need a return to a muddled, politically conflicted, bureaucracy - we need a stronger focus on social imperatives delivered within strict commercial discipline".

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