Labour banged on for years about how they were going to fix the housing crisis. Then they got elected and basically twiddled their thumbs. Their much-vaunted Kiwibuild programme became an embarrassment and was quietly put down. In the meantime, house prices have inexorably climbed.
What has the Prime Minister done about it? The same as she usually does, mouth meaningless platitudes and slogans, but not actually do anything. The media are waking up to her now:
House prices, Prime Minister Jacinda Ardern said, cannot keep increasing at the rate they are.
It was November 12, 2020. In the 12 months ending October 2020, the country’s average property value went up by $55,834, according to CoreLogic data.
One metric showed every region except Canterbury saw house prices increase by more than the average worker takes home in a year.
These hikes prompted some public concern, but at the same time the “median voter” was seeing their capital gains skyrocket. And voters like to feel richer.
When asked about the issue in the Beehive, Ardern insisted access to homes for first-home buyers was important, she had concerns about affordability, and that the Reserve Bank had the tools to impact the market.
She also said data showed an increase in first-home buyers since 2017.
That one sentence jumped out: “It just cannot keep increasing at the rate that it is.”
But they could – and then some.
In the four months ending February 2021, average property values rose by $74,388 according to CoreLogic.
Stuff
The reality is that you can’t talk house prices down. You actually have to do something that massively increases the supply side. In that regard, the government are laggards in actually doing anything.
Their Kiwibuild plans ended ignominiously. Labour have also failed to do any meaningful reform to the Resource Management Act, and their other policies such as focusing on public transport, compact cities and their general transport plans pretty much guarantee that cities like Auckland cannot expand to make more land available.
While they use urgency to pass undemocratic local government reforms they have spectacularly failed to do anything to help the supply side of the housing equation.
They’ve used up six months of their second three-year term already, so the chance of actually getting any meaningful legislation through in time to make a difference to the housing market before the next election has passed them by.
In any case, any moves that would make a dramatic impact that would correct house prices in a meaningful manner would have a severe electoral cost as well. People don’t like seeing hundreds of thousands of dollars shaved off their house prices.
Labour has made a rod for their own backs. They talked a big game on housing and it turns out they are as meek as mice when it comes to delivery. They won’t get a third chance at fixing this.
