Too much talk and policies
The Auckland housing market is planned chaos. We have Government intervention upon intervention.
There are policies driving prices up. There are policies driving prices down. It’s a new policy every week.
The Government announces policy. The Opposition announces a bigger one. The Government points the finger at the Reserve Bank. The Reserve Bank points the finger at the Government.
I defy anyone outside the book-keepers across a dozen Government departments to detail “Government housing policy”.
The madness is illustrated by just two of a dizzying array of housing policies.
We have “special housing areas” to build more houses, faster, to make housing “affordable”.
We also have the “Welcome Home Scheme”, which allows low-income, firsthome buyers to get mortgages at only a 10 per cent deposit. Reflect on that for a moment. The Government is committed to making housing “affordable”. Ministers have announced policy to do just that. The Opposition is promising even more.
That means houses prices lower than they are now. That’s supposing the policies work.
Serious people say “affordability” means a price drop of 40 per cent. But even a 10 per cent drop would wipe out a low-income family’s equity.
One policy had the poor family commit their entire savings — and perhaps then some.
The other Government policy wipes those savings out.
That same family having to sell would end up with no house, no savings and a debt to the banks, all thanks to the Government.
It’s financial entrapment and economic sabotage. It suits politicians. The more policy, the more they appear to be doing. The more they seem to care.
It is an incoherent mess of a bit of policy here, a bit over there. And, oh, over there, too. It adds up to a great contradiction and very little result. Perfect.
Delivering “housing affordability” would produce an economic and political fall-out.
That’s why no politician will define “affordability” as a price. In politics it’s quite possible to be pushing for “affordability” while preserving homeowners’ equity. In the real world, it isn’t. The best thing would be no policy. But what would our politicians do then?