NZ’s new housing minister lashes policy malfeasance

By Leith van Onselen

Hot on the heels of his masterful speech to the Salvation Army setting the framework for Labour’s housing reform agenda, New Zealand’s housing minister, Phil Twyford, has been presented with a damning briefing on the state of the market, which has caused “stark” inequality between young and old. From

The briefings for incoming Housing Minister Phil Twyford show a 45,000 home gap in Auckland.. Twyford maintains the previous Government intentionally kept the number secret.

Officials over two of the briefings on housing do not mince words, blaming high house prices for widening inequality.

“High levels of immigration and fewer departing New Zealanders, along with natural population growth has seen demand for housing outstrip supply,” they write, pinpointing the start of this trend to 2003.

Both rents and house prices have risen far faster than incomes.

“High house prices have stark distributional impacts: they transfer wealth from younger and less wealthy people to existing landowners, who are generally richer and older. The substantial increase in house prices over past decades appears to be the major cause of the observed increase in wealth inequality in developed economies, and the ongoing effect is one of restricting access to opportunity for the young and less well off.

“This flows into wider social costs, including overcrowding and homelessness, health problems, and poor educational and labour market outcomes.”

Officials note that high house prices also cause a significant drag on productivity and increase government costs.

Commenting on the briefings, Twyford lashed the former National Government for ignoring the housing crisis. From TVNZ:

“The picture that emerges from the briefings … there is a massive level of un-met demand.. the fact the government has been spending $100,000 a day on motels.”

He said he did not think it was an “anomaly”.

“It reflects a housing market that has been getting significantly worse since 2010/2011. We’ve inherited a mess, this is a social and economic disaster for the country it is quite complex.”

He said he was shocked to see there was a housing shortfall across New Zealand of 71,000.

I noted in the lead-up to the New Zealand General Election, held on 23 September, that Labour had an excellent housing platform that addresses both supply and demand distortions via negative gearing reform, banning foreign buyers of existing homes, tighter capital gains taxes, removal of urban growth boundaries, plus bond financing for infrastructure. Its plan to reduce immigration by around a third is also sound, and would help to relieve chronic housing and infrastructure pressures, especially around Auckland.

It’s going to take every ounce of effort by Labour to turn this mess around.

As an aside, check-out this excellent documentary on the NZ housing crisis.

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  1. Prices have to fall a bloody long way, immigration dialled way back and foreign purchasers of existing homes whacked hard with holding costs to force housing back in kiwi hands

  2. As always … thank you Leith for an outstanding effort.

    The new Labour – led government will need to hit the ground running early in the New Year … focused on the abolition of urban limits and the introduction of bond financing for infrastructure .

    Note in particular the Ardern / Twyford section at my archival website

    The 2018 14th Annual Demographia International Housing Affordability Survey is to be released Monday 22 January 2018.

  3. UE, you will never get a Game of Mates gig if you criticise the great and good like this.

    The current mess is due to profound policy errors by both strident conservatives and cowed progressives. Just gloss it over and the opportunities will seek you out. You have nothing to lose but your septum.

    Don’t Buy Now!

  4. But when will we get similar sensible politics here? I mean this kind of radical thinking makes me want to move to NZ.

    • Gavin … remember this SHH article from early November ?

      There are hugely important public attitudes shifts underway in Australia now …

      From boom to gloom: how rising house prices have become a worry … SMH

      When Australians are asked what worries them most, things such as healthcare, the cost of living, unemployment and crime are always near the top of the list.

      But during the past two years a new source of anxiety has registered in the polls: housing. … read more via hyperlink above …
      I have seen others as well echoing this. It is extremely heartening to me.

      We need to see Australia competing with New Zealand in supplying increasingly affordable housing !
      That should not be too difficult if this Auckland example is any guide …

      Catch 22 for first-home owners overcome for young Auckland couple |

      Natasha King, Matt van der Haast and their two children, Jamie, 5, and Emily, 2, first featured on Stuff a year ago, when they were living with King’s father in order to save money for their first home.

      The couple was the first to sign up for a house in the new Belmont subdivision in Pukekohe under the Special Housing Areas legislation, which meant the completed “affordable” houses in the subdivision could not be sold for more than 75 per cent of the median house price in the Auckland region, which was $578,250.

      At that time most developers had shied away from the subdivision saying it was not possible to build a house for under $600,000 in the greater Auckland area. … VIEW & READ more via hyperlink above …

  5. Insecure rentals mean Kiwis move too much, and it’s a human rights issue: Commission … Stuff / Fairfax NZ

    The private rental market is forcing low-income Kiwis to move too often, the human rights watchdog has told the new Government.

    In their briefing to incoming Justice Minister Andrew Little the Human Rights Commission (HRC) point to housing as a serious human rights issue that is likely stopping New Zealand meet its international obligations to uphold human rights.

    They suggest an increase in secure social housing to combat New Zealand’s rate of “residential mobility” – where almost one in five Kiwis move every year. This is the highest rate of moving in the Western World, and close to twice the rate in the UK. … read more via hyperlink above …

  6. OPINION: Going, going, gone? National and its legacy … Tracy Watkins … Stuff / Fairfax NZ

    OPINION: It’s taken this long, but the shell shock of finding itself in Government seems to be wearing off for Labour.

    After an untidy start, the fightback has begun.

    The flood of “BIMs” – briefings to incoming ministers,170 of them in total – has provided the opening to a conversation about National’s legacy not being all it was cracked up to be. … read more via hyperlink above …

    Read more within the GONE GONE GOING section