tag:blogger.com,1999:blog-38893560.post778442761607825083..comments2023-10-08T12:11:52.993+13:00Comments on New Zealand Conservative: NZ - Land of the Big HammerLucia Mariahttp://www.blogger.com/profile/10485990994973953860noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-38893560.post-4359778755040721612014-03-15T23:10:26.091+13:002014-03-15T23:10:26.091+13:00Hi Lucia Maria.
I have been looking at this issue...Hi Lucia Maria.<br /><br />I have been looking at this issue a lot over the last few years. The problem in New Zealand (and exacerbated in the larger cities) is Local Councils who restrict land supply. Because of this restriction, combined with growing demand for housing, the cost of land has gone up astronomically.<br /><br />The result of that is extremely unaffordable housing in Auckland and Christchurch. What infuriates me about the left-leaning council's policy is its disregard for the poor. We are now in the position that on average the cost of a median priced house in Auckland is 8 times the average household income; comapre that to family of mine in the USA where it is around 3 times. The impact this has on families and especially on poorer people, is catastrophic. The left want the poor to stay poor so that they have to 'rely on the state'.<br /><br />The Reserve Bank can't set Council policy, but they are extremely alarmed at the subsequent increases in house prices. Some of it is because foreigners can see there is money to be made in residential investment, and they have assets/cash that are in excess of what an average New Zealand family has. Other families in New Zealand take on two jobs and have mortgage stress. Other families simply can't afford the mortgage, so they rent. Home ownership is declining in NZ. Change Local Governmetn policy and foreigners will stop buying for speculative reasons.<br /><br />To counter the inflationary damage that the Local Council policies are inflicting on New Zealanders, the Reserve Bank raises interest rates, in trying to dampen demand for housing (and therefore prices; I'm sure you're familiar with the logic :)). Yes it hurts your family, my family and the economy. But if we don't then we risk an Ireland style real estate crash or a US style crash - which only happened in cities that practise land supply restrictions, not in other cities (approximately 100) across the USA which doesn't practice land restrictions. The jury is still out as to whether the Reserve Bank's actions will avoid that problem, but to do nothing could present bigger problems.mjaewnoreply@blogger.com