Politicians on New Zealand's over-valued property

Posted by admin on September 15, 2014

Politicians weigh in on Auckland’s over-valued property 

Restrictions on new land supply and suffocating planning rules and costs were the major causes behind Auckland’s over-valued property, National’s finance spokesman Bill English said last week.

Mr English, along with MPs from the major parties, was addressing business groups at the Deloitte-Business NZ election conference in a pre-election bid to win-over  support.

“"We've chosen a very expensive rapidly rising housing market, with the price of land rising because of restrictions on new supply, and planning rules adding to costs,” he told the conference.

"In Auckland it's basically illegal to build a house that's worth less than half a million," Mr English said.

He said the only low-cost houses being built were by Housing New Zealand and aside from that there was no new supply and that was wrong.

Labour finance spokesman David Parker said introducing a capital gains tax that excluded the primary family home "logically must" address housing-cost pressures.

"If you change the marginal pressures on buying houses it must have an effect on who is buying the houses," he said.

Before Australia introduced CGT its home ownership rate was below that of New Zealand, but that position had now reversed.

"It's not a universal panacea. You have to address supply issues as well as demand pressures," Mr Parker said.

Green Party co-leader Russell Norman told delegates Auckland needed more density, particularly in the centre of the city. ACT party leader Jamie Whyte agreed the issue was due to supply, citing land in Auckland now accounted for 60 per cent of a new house’s price, whereas it was 25 per cent in the 1990s.