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New Zealand has a longstanding housing shortage. It's a giant mess, but fundamentally it comes down to constraints against getting more housing built.
The current price inflation is the intersection of that mess and RBNZ money printing.
Subsidising buyers will not help. https://twitter.com/TheSpinoffTV/status/1328531042798452741
The current price inflation is the intersection of that mess and RBNZ money printing.
Subsidising buyers will not help. https://twitter.com/TheSpinoffTV/status/1328531042798452741
The long-term deepest fix to the problem is to make it be in councils' interest to accommodate growth. Get that right, and the rest becomes much easier.
Short term is really really hard. The sector faces capacity constraints that are hard to overcome when Covid hits mobility.
Short term is really really hard. The sector faces capacity constraints that are hard to overcome when Covid hits mobility.
But you can use long term expectations to affect the short term. If everyone knew and expected that new construction would be coming in, and hard, for both a surge to get through the worst of the shortage and a rolling maul over the decade after, that would affect prices now.
How do you do that? Credible moves that shift the long term equilibrium, even if they don't get new houses built tomorrow.
"From 1 January 2021, until 31 December 2025, Councils will get a grant from central government equal to the GST collected from new building in their area."
"From 1 January 2021, until 31 December 2025, Councils will get a grant from central government equal to the GST collected from new building in their area."
That isn't my preferred way of compensating councils for the costs they bear in accommodating growth, but it can be done more quickly.
If a million-dollar build means $150k in revenue for Council, they'll find ways to encourage it.
If a million-dollar build means $150k in revenue for Council, they'll find ways to encourage it.
