Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Bad Regulation Has Led To Unaffordable Housing

Bad Regulation Has Led To Unaffordable Housing

"Misconceived restrictions on the development of land have led to unaffordable housing”, Roger Kerr, executive director of the New Zealand Business Roundtable, said today.

He was commenting on the release of a report, Regional Housing Markets in New Zealand: House Price, Sales and Supply Responses, by Arthur Grimes and Andrew Aitken of Motu Economic and Public Policy Research.

The report was prepared for the Centre for Housing Research, Aotearoa New Zealand, the Department of Building and Housing, and Housing New Zealand Corporation.

The Motu report shows that land prices have increased much more rapidly than house construction costs, which have remained static or fallen slightly in real terms. Importantly, the rates of increase in land prices differ among local authority districts and regions.

Between 1981 and 2004, the price of land, after adjusting for inflation, increased on average by 105 percent. However, it increased by almost 700 percent in Auckland City but fell in four areas.

Land prices were found to have increased more rapidly where the supply of land responded slowly to changes in the demand for housing.

Mr Kerr said that restrictions on the development of land (sometimes called ‘smart growth’ policies) are impeding the supply of sections and have pushed land and house prices to levels that are unaffordable for many people, particularly those on low incomes. They also push up the cost of renting homes.

"Motu's findings reinforce the Demographia International Housing Affordability Survey which ranked the three New Zealand housing markets that were examined (Auckland, Christchurch and Wellington) as “severely unaffordable”.

"The Motu report correctly states that its implications for policy are “unambiguous”. Policy must focus on keeping construction costs and land costs to a minimum, and regulatory and planning processes need to be closely scrutinised.

“New Zealand does not have a shortage of land. Only 1.4 percent of our land area is urbanised. Mayors Sir Barry Curtis of Manukau and Bob Harvey of Waitakere are to be applauded for their recent statements that more land needs to be freed up urgently.

"The business community has been highlighting the economic harm inflicted by the Resource Management Act and other unwarranted constraints on the development of land and buildings for many years.

"If central and local government are genuinely concerned about the affordability of housing they should act on the findings of the Motu report", Mr Kerr concluded.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 



Consumer NZ: Buy-now, Pay-later Raking In $10m+ In Late Fees Annually

A Consumer NZ survey has found buy-now, pay-later services are costing shoppers more than $10 million a year in late fees. Close to four out of 10 Kiwi consumers use buy-now, pay-later services, such as Afterpay, Laybuy and Zip... More>>

Westpac: Catherine Mcgrath Appointed New Zealand CEO

Westpac Group CEO Peter King and the Westpac New Zealand Board today announced the appointment of Catherine McGrath as Chief Executive Officer, Westpac New Zealand... More>>


Amazon: AWS To Open Data Centres In New Zealand

Today, Amazon Web Services (AWS), announced plans to open an infrastructure region in Aotearoa New Zealand in 2024. The new AWS Asia Pacific (Auckland) Region will consist of three Availability Zones (AZs) and join the existing 81 Availability Zones across 25 geographic AWS Regions at launch... More>>

ALSO:



Statistics: Surge In Imports Results In Record Monthly Trade Deficit
Imports increased $1.8 billion in August 2021 compared with August 2020, resulting in a record monthly trade deficit of $2.1 billion, Stats NZ said today. Exports were little changed, down $42 million. "This is a larger deficit than normal because of higher values for imports.. More>>

Fonterra: Completes reset, announces annual results and long-term growth plan out to 2030

Fonterra Co-operative Group Limited today announced a strong set of results for the 2021 financial year, reflected in a final Farmgate Milk Price of $7.54, normalised earnings per share of 34 cents and a final dividend of 15 cents... More>>


Statistics: GDP rises in the June 2021 quarter

Gross domestic product (GDP) rose by 2.8 percent in the June 2021 quarter, following a 1.4 percent increase in the March 2021 quarter, Stats NZ said today. June 2021 quarter GDP was 4.3 percent higher when compared with the December 2019 quarter... More>>