Herald on Labour’s Housing Package

The Herald editorial gets to the nub of the problem:

The perverse thing about the Government’s attempt to tackle housing affordability is that it has accurately pinpointed the reason for young house-hunters’ gloom. “Fundamentally, the problem is the under-supply of affordable homes,” said Helen Clark in her statement to Parliament. This suggests an understanding of the fact that house prices rise when demand runs ahead of supply. Any rational response would, therefore, seek to increase supply while, at the same time, reduce demand. Sadly, the Government’s response tinkers around the edges of supply while stimulating demand, thereby underpinning prices.

Yes there could be a very interesting reaction to what the Government says it will do.  Giving some people interest free loans will increase demand for houses, which will push prices up for everyone.  Those who do not qualify for interest free loans could be very very pissed off.