On housing

Stuff reports:

New Zealand’s high housing prices are “a choice”, with building affordable housing in Auckland “basically illegal” under current settings, National finance spokesman Bill English says.

Politicians from the major political parties are today wooing business groups at the Deloitte-BusinessNZ Election Conference.

At the opening session, for finance leaders, English said the audience would be familiar with the recent Economist report showing New Zealand had some of the most expensive house prices in the world.

“That’s a choice made by New Zealand,” English said. “It’s not a fact of nature.

“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.

“In Auckland it’s basically illegal to build a house that’s worth less than half a million,” English said.

I’m glad Bill understands this, and is saying it. Every expert body that has looked at house prices has come to basically the same conclusion.

More land had been consented for residential housing development in the last nine months than in the previous nine years, English said.

And that will make an impact as it becomes ready for developing.

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

To quote Jamie Whyte, that is a fourth form economics argument.

Australia has a CGT and their house prices are rising even faster than NZ in some cities.

Also the Labour CGT is so exemption riddled, the impact would be minimal.